Yesterdays I recommended that the 50% Fib. retracement be looked at for the next support. today it seems to have made a stop there and a possible divergence could occur in the 60min chart to move prices down for tomorrow. Again on an EW pattern the 62% retracement is a critical juncture which is at the 1593 range. This separates our count from a 4th to a possible penetration lower to complete a 1st wave down on a bearish note. The reason for this is that a 4th wave cannot overlap the 1st wave. The other alternative for a bullish count is if it does penetrate the 62% Fib. we can possibly count it as a 2nd wave of some other degree. For now the 4th wave is still intact.
Mid-Term: DOWN
Short-Term: DOWN
Our daily chart for the SPX has not seen an oversold condition since Nov. of 2012. This is a good sign for bears. Also one thing to note, is that prices have pierced the lower BB line in a daily scale so a rally is not out of the norm.
On a Canadian Stock Exchange note, we are entering a very bearish setup. One that could collapse at any moment. This week the TSX would have to close with a weekly reversal candle to keep the bullish trend from April alive.
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