Here is the range I expected to contain the market this week:
ES chart, Oct12 - Oct21
However, I also expected the market to trade near the lower boundary by today or tomorrow and offer a buying opportunity. It does not seem to happen.
The put/call ratio has become more oversold, despite yesterday's rally:
Usually, this would imply immediate higher prices, but this time the gap up may be enough to flush the bearish sentiment. I still expect a move towards the lows of the range before a break out to the upside.
3 comments:
What do you think about
http://www.bestonlinetrades.com/wp-content/uploads/2010/10/sp500triangle.png
may drop to 1130 and lower till 2-3 Nov 2010 ?
or flash crash repeat?
http://www.bestonlinetrades.com/wp-content/uploads/2010/10/sp500201010201.png
http://www.bestonlinetrades.com/wp-content/uploads/2010/10/spuptrendline.png
Grateful previously.
This rally has a very similar rhythm to the one this spring but I think expecting another flash crash is going too far.
I agree that the market can play out similar fractals that can last for several months but, as I see it, the flash crash was an event that popped unexpectedly and is in no way related to the action 1 month before it.
I expect downside but only after the Fed meeting. That will be the event that will make or brake this bear market.
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