Thursday, October 28, 2010

A flat week so far

Almost no change this week, SPX moved 10-20 points up and down but at the end of each trading day it remained almost unchanged. We still have a bullish EMAs crossing on hourly chart, DMI is green on both daily and weekly charts but one indicator, MACD, turned slightly negative so I think we should be cautious here and maybe take a little bit of the profit from the table. MACD is usually more sensitive than both EMAs crossing and daily DMI which works both ways, is taking you out of the market or brings into the market faster than EMAs and DMI but also generates more false "buy" and "sell" signals.

Gold is giving mixed signals, bearish EMAs crossing, price bellow flat 5 days SMA but daily DMI is slightly positive one more time. Silver on the other hand turned bullish again, we have a bullish EMAs crossing, price above rising 5 days SMA. In top of this daily and weekly DMI are positive. One should be aware that MACD didn't give a "buy" signal for neither of them


  1. Thanks babaro. I've been following your blog, and I find your advise very useful. Looking forward to reading more.

  2. Babaro, do you think a double top is forming in the S&P?
    I just posted my thoughts, but am not that great at technical analysis.

  3. Thank you, "Anonymous", I am glad you find my comments useful, that's the whole idea, to share my experience with people that may not know as much as I do about trading. I lost a lot of money in stock market before I managed to get a grip on trading and I know what a horrible feeling is to see your hard earned money vanishing.

  4. PW Bailey, you probably know by now that I never try to anticipate what the next move is going to be but I rather like to REACT to the market. If market is going to top around 1200 or not I can't tell you now and it doesn't make absolutely no difference to me since I am going to sell only when EMAs is going to give a bearish crossing, whenever this is going to happen. In April when market went down I sold my shares around 1180 so you can say I lost 40 points since the top was at 1220 but I don't see it this way, I reentered the market in February at 1070 so I actually made 110 points. I can guarantee you that people that tried to outguess the market made less money than me.

    What I can tell you now is that market seems to have trouble overcoming the 1180 level, the one that signaled the beginning of the leg down in April. What I can also tell you almost for sure is that around 1220 we will see some resistance even if in the end market is going to go above this level. What troubles me a little bit is that MACD looks bearish and also that NYSE already shows a bearish EMAs crossing and DOW is pretty close to that too.


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