November 23, 2011

  • Price falling down in a channel.
  • Hour chart is trending down below 20 Hour SMA.
  • For bulls price has to get out of the channel and stabilize above 20 Hour SMA.
  • Crude Oil Daily chart with 20 Day SMA.
  • Price closing below 20 Day SMA will strengthen bears of crude oil.
  • Weekly chart has given a bearish candle as discussed in a previous post. Now its the time for daily chart to confirm weakness by closing below 20 Day SMA.
  • ES four hour chart shows price continue to break support levels and move down. For bulls price has to breakout above the channel.
  • Price also continue to stay below 50 Hour SMA. As long as price does not break above 50 SMA a meaningful up move will not take place.
  • VIX is looking good for bears. If it crosses 29 - 30 levels then volatility on the downside will increase. Unable to cross above 29 may give some relief for bulls.
  • Price is below month low EMA and closer to the important support level of 4720 this combination has held for the last 3 months.
  • Risk reward ratio favors a long trade here but the way price is getting rejected at day low ema is not helping bulls. So its better to wait for that close above 5 Day Low EMA which has not happened for many day's now.


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"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore