Friday, October 19, 2012


I was wrong, I predicted that bulls won't be able to defend the 4-month uptrend line this week but they did it. Well, at least for a few more days.

Technically we are at the same point as last Friday with SPX battling the 4-months uptrend line. Last Friday I've got a sell signal according to EMAs crossing, signal canceled this week, just to get another "sell" signal today. I am always suspicious when "buy" and "sell" signals appear one after another because they tend to mislead. Time to take a step back and look at other indicators.

On daily chart we have now a triple top but bulls managed to keep SPX above the 4 months uptrend line. If you really zoom in you can say SPX is 1-2 points bellow the uptrend line but this is not significative. Once again daily DMI is slightly negative. For this market to get bearish we need to see SPX bellow the uptrend line (now around 1,434) and a lower low bellow 1,428.

On weekly chart SPX appears slightly bellow SMA 50 and once again bears need to see SPX making a lower low, bellow 1,428. Weekly DMI is still positive but pointing down. 

The bull market uptrend line is now around 1,315 and SMA 200 is around 1,380. These two levels are going to be extremely significative support levels if market is going to plunge from here. 

Dow looks almost as SPX but Nasdaq seems to be the "weakest link" showing 3 lower highs and 3 lower lows on daily chart,  daily and weekly DMI on red, bellow SMA 50 and almost touching SMA 200. Not only that but the bull market uptrend line is around 2,900, very close to today's level. 

Are the bulls going to defend the 4-months uptrend line once again? We'll see it next Monday! Until then, all the best and have a nice week end!


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