Sunday, June 12, 2011

Market Indices

As foretold here and here, the markets followed thru with their downdrafts.  The Naz joined the contagion as seen below.
 The Naz has fallen about 8% from its recent high leaving the index flat for the year.  The weekly indicators still look bearish, however, price is nearing a 2 1/2 year trendline along with the 50 week ema.  2610 would be a very objective entry point to the long side because the stop would be near 2590, limiting the downside.  Zooming in a little bit, the daily chart is below.
The indicators on the daily chart are getting very oversold suggesting some sort of bounce, or, at least, not much more downside short term.  The bearish engulfing candle on 6/1 is glaring on the daily chart, as is the potential buying zone near 2600.  My current roadmap is an oversold bounce from 2605 (stops at 2590) with a rally perhaps up to 2800 forming a potential right shoulder for a head & shoulder move.  I hope it doesn't happen since more downside would be expected, but you have to play what you see, not what you hope for.

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