Tuesday, November 16, 2010

Bearish trend

I have no doubt that the intermediate time frame trend has turned bearish. EMAs crossing did a good job, one more time! How long is this trend going to continue? I don't have any idea and I don't care. Of course I hope it's going to continue for a while so we can make some money on the short side but if it's going to turn bullish again we are going to cover and switch sides.

As a confirmation of the change in trend daily DMI has turned red for all indexes today.

Dollar continues to get more strength which also helps our short ETFs. Why is going up? I don't have any idea. Probably market already priced in QEII and now has no room to go but up. Daily DMI has turned positive and price managed to climb above the downtrend line. But if you look in the recent past the key signal was given by EMA15 crossing EMA30. They are very close but not there yet.

"Volume at price" indicator gives us some ideas where we can find some good support levels. Keep in mind that these levels depend on what time frame you are looking for. The one I chose is April-November. This indicator shows at what price we had the highest volume, also it tells us who were in control at a given price, bulls or bears. For April-November period the best volumes occurred at 1180, 1115-1130, 1090 and the highest of all at 1070. In my opinion 1130 is the most important level since there we can also find SMA200. Again, at what level is the market going to stop plunging  is not my biggest concern, nobody knows for sure where and when the trend is going to change, we are just speculating here.

Have a nice evening!


P.S. Bears were generous with me today, they clicked on my adds so I bought not only a coffee but a couple of beers too. Now I can have friends over :)

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