January 15, 2012

  • Points favoring Bears of SPY. 
    • Low volume up move shown in weekly chart.
    • Price closing in on weekly resistance line.
    • Bulls struggling to go pass 78.6% Fib level for the for the fall from 135 to 137
    • And most importantly RSI is turning down from very overbought levels which has resulted in correction.
    • Even if an up move comes that will be accompanied by negative divergence so an up move through these resistance lines is unlikely to last long.
  • For Bulls They have to do a large volume breakout above the resistance line, Even then the way Daily RSI is positioned does not favor big up moves. 
  • IWM - WEEKLY RESISTANCE LEVELS (50 WEEK SMA AND GOLDEN RATIO)
  • DOW JOES WEEKEND UPDATE




  • Dow Jones made an attempt to close the week above the resistance line but got resisted and closed inside the weekly pattern.
  • Daily charts have started to diverge negatively as shown with Chaikin Money Flow Indicator. But as all divergence price needs to confirm for a sell to be triggered. Closing below 20 SMA will confirm the weakness. 
  • Last chart also shows a possible rising wedge pattern. If 20 SMA is taken out by bears a correction towards the supporting trend line is possible. Price staying above the resistance line will negative the bearishness for a while.
  • IWM - WEEKLY RESISTANCE LEVELS (50 WEEK SMA AND GOLDEN RATIO)


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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."
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