Traditional markets have taken a beating, but should see some sideways action or even a bounce leading up to the Midterm Elections in the United States.
Bears will be looking for a dead-cat bounce to exit at a better price, and bulls will want buy prices back near year to date lows.
From a chartists perspective the DJI is showing a confirmed bullish reg divergence on the RSI and Stoch. For a tight stop any daily close below 24400 is a quick exit signal, otherwise several consecutive daily closes below 24400 will invalidate the divergence.
I believe it is likely we will see a few days of action between 24300 and 25000 before a break above that level. Price has entered a short term bearish trend and secondary sideways trend within the primary bull trend.
Bullish divergence - bottom is in for now unless above condition met.
Bears will be looking for a dead-cat bounce to exit at a better price, and bulls will want buy prices back near year to date lows.
From a chartists perspective the DJI is showing a confirmed bullish reg divergence on the RSI and Stoch. For a tight stop any daily close below 24400 is a quick exit signal, otherwise several consecutive daily closes below 24400 will invalidate the divergence.
I believe it is likely we will see a few days of action between 24300 and 25000 before a break above that level. Price has entered a short term bearish trend and secondary sideways trend within the primary bull trend.
Bullish divergence - bottom is in for now unless above condition met.
Comment:
Reaction has been far more bullish than I anticipated
Comment:
3 day bounce on declining volume and failure to break above 25840 is a bearish signal. A daily close below that 20 sma will be another. So far looking like a dead cat.
I will continue to consider this a dead cat bounce and continued bearish/sideways action unless price can close a daily candle above 25850.
A daily close above the 20 sma is the first signal that a test of 25850 is possible, otherwise I will be looking for a reaction on the 5 sma.
The declining volume on the price rise is a clear warning though that the market is not buying as though the bottom is in yet.
I will continue to consider this a dead cat bounce and continued bearish/sideways action unless price can close a daily candle above 25850.
A daily close above the 20 sma is the first signal that a test of 25850 is possible, otherwise I will be looking for a reaction on the 5 sma.
The declining volume on the price rise is a clear warning though that the market is not buying as though the bottom is in yet.
Bullish break of Symmetrical triangle happened beautifully and turned into a bull trap for long term buyers. Drop after the top formed a classic Dow Theory SFP.
So this divergence I am looking at has high potential to turn into another SFP if price stays below 25000, or bear flag if price stays below 25800.
Still tradable as a divergence though short term.