Okay so I know a bunch of lines are on this graph.. So let's take a look at them. The blue trendline is the long term trendline and as can be seen has not been violated as it is at about 12,000. Then there is the H&S top pattern that is shown in Purple and it looks to me like that pattern is very suspect so I think I'm just going to discard that pattern. Then there are the green lines. The green lines are support (12,750) and resistance (13,000). If the bulls don't take it above 13,000 this week I will guarantee that the support at 12,750 will not hold and we'll go back down. Finally there is the Orange trendline which is the short term downtrend that we are currently in which goes from the head to the shoulder and then touches this most recent top. We need to break out of this trendline if the market is going to be going higher. Onto the other idicators: The MACD has just crossed and the MACD histogram has come into bullish territory. The ADX DI- has gone down and is getting closer to the DI+ but has not crossed over yet. Furthermore it looks as if the ADX trendline might be coming down which would be bad for the bears. Finally the RSI looks like it is about to bounce off of the trendline formed from the head.
All in all this next week will again depend on the earnings announcements but technically it still looks like we need to go lower, base for a bit, form a bottom and then break out. Close on the week above 13k is bullish and below 12.75 is bearish.
1 comment:
You are over analyzing. ALL oscillators are simply derivatives of price and volume. Pick which one gives you the most reliable signals and build your trading system around it.
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