P&F gave a bullish signal but is kind of ambiguous since it’s below the bearish resistance line.
Weekly, the flattening of the ma(s) are signaling a pause, now, did the 4 week downtrend ended or is this just a pause?. I like to put my money in a well-defined trend which I am not seeing now, the 4-week channel was broken to the downside and the MACD is pointing down, however the price is above my SAR at 12661.30.
For next week my bullish SAR is at 12661.30 and the bear SAR is at 12495.6, the DOW closed above both, in the middle is no-trade zone, below both is short and above is long, but I need all signals to coincide so for now I’m out.
60 minutes show a precise 5 movement to the downside, 2-4 and 3-5 are inside a channel so it’s kind of textbook.
The down move ran for 35 days and 1303.5 Dow points, importance is in form not ratios but sometimes it pays to look at them. If the 1303.5 points down was in fact a first leg down, the retracement should be shorter in time and points. 62% of 35 days is 22 days; the upside must stop before June 26, after that the bear is in doubt. 75% of 1303 is 977 at 13012; above that there’s still a possibility of being a retracement but most certain than not the Down will be going to 100% retracement.
Volatility is going up steadily since middle March but still at acceptable numbers, volatility always resolves the Dow to the downside but it can take a long time.
Conclusion: It is hard earned money you are trading here, wait for all signals to coincide, that way you are never going to pick a top or bottom but you will be getting profits. I am out since May 21 when I sold all my short funds at a profit , at this moment my data signals that we are in a retracement of a bear market so I’m waiting for the right moment to short again, however my opinion could change if my analysis in the following days or weeks signals different.
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- Erick Stern
- I am a civil engineer who likes charts, to me, speculating in the markets is both a hobby and a second profession and in my view the stock market is the most honest environment, since it is only your knowledge and preparation that matters. I live, and work in the construction industry, in the Dominican Republic. I read and answer all my mail so please feel free to write firstname.lastname@example.org Thanks, Erick