Just when I was ready to admit that I was wrong about the long term bearish view SPX moved down almost 70 points and found support only at the upper edge of the previous trading range. This is slightly bellow SMA 75 on weekly chart, a level I always have in mind when looking at the big picture. Bulls did all the right moves, pushed SPX above the trading range, then above the resistance level around 1270 where the plunge begun. They even pushed the market above SMA 200.
EMAs still show a bearish crossing on weekly chart despite the fact market rallied more than 200 points last month, from the 1075 bottom to 1290 top. Weekly DMI continues to remain bearish but also daily DMI has turned negative. Bulls still have a chance to turn the table in their favor on long term if and only IF they manage to push SPX above the trading range and SMA 75. This is bulls' best support level. If market re-enters the trading range the next good support level is 100 points bellow, around 1120.
The news are driving the market these days. After getting help from Europe the Greek population most likely is going to reject it since the help is going to come with some strings attached, more austerity. Personally, I think Greeks are shooting themselves in the foot long term with their refusal but it's their choice. Overall the European picture is not that great. Keep in mind that Greece is not the only country in trouble is just the most affected by the crisis. Ireland, Spain, Portugal and even Italy are not far away.
From what I am reading the referendum is not a done deal since the Papandreou government is almost collapsing but uncertainty is also a market killer.
The dollar is also killing the market. UUP jumped for a third day in the row and now is touching the upper edge of the trading range. Yes, the dollar was also trading in range since March. If you look at it's chart is the reverse of SPX (no surprise here).
Let's see how the Greek drama is going to end. We are going to know this on Friday when the Greek government is going to endure the confidence vote. Meantime most likely the market is going to move down but maybe not as violent as in the last two days.
All the best!
babaro
EMAs still show a bearish crossing on weekly chart despite the fact market rallied more than 200 points last month, from the 1075 bottom to 1290 top. Weekly DMI continues to remain bearish but also daily DMI has turned negative. Bulls still have a chance to turn the table in their favor on long term if and only IF they manage to push SPX above the trading range and SMA 75. This is bulls' best support level. If market re-enters the trading range the next good support level is 100 points bellow, around 1120.
The news are driving the market these days. After getting help from Europe the Greek population most likely is going to reject it since the help is going to come with some strings attached, more austerity. Personally, I think Greeks are shooting themselves in the foot long term with their refusal but it's their choice. Overall the European picture is not that great. Keep in mind that Greece is not the only country in trouble is just the most affected by the crisis. Ireland, Spain, Portugal and even Italy are not far away.
From what I am reading the referendum is not a done deal since the Papandreou government is almost collapsing but uncertainty is also a market killer.
The dollar is also killing the market. UUP jumped for a third day in the row and now is touching the upper edge of the trading range. Yes, the dollar was also trading in range since March. If you look at it's chart is the reverse of SPX (no surprise here).
Let's see how the Greek drama is going to end. We are going to know this on Friday when the Greek government is going to endure the confidence vote. Meantime most likely the market is going to move down but maybe not as violent as in the last two days.
All the best!
babaro
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