looking ahead pt 1
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use internet explorer. on a weekly basis, there are hints of positive divergences. not as clear on the rsi and maybe just under way, but it is more illustrative under the cci 28, which will closely mock the rsi 14.(thx dj)
using this longer horizon we see the struggle that ensued over recovering the fib level at 2466ish. in the longer horizon this clearly needs to be recovered. that would be the bullish scenario. 8-8-97 to 7-24-98 across the tops, should be verified, but i see this as the current support level as best i can draw it, do verify. i'm using the 2-4 to 5-26 line as the lower channel of this downtrend. this line was chosen as it reflects the last two serious bounces that occurred. we can see that its moving into an area that would potentially support a double bottom scenario. we can see that if that line is breached, we're most likely looking at the potential for the .78(purple line) to be tested.
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thats the daily. a largely bearish candle ensued friday. using the rsi as our guide we see the potential for another bearish leg in its inability to break 50 again. a few months back i mentioned the shifting of the "horizons" on these indicators and you can see that has taken place in that most bounces didn't break 50 and none exceeded 70. i've heard friday called "hedge window dressing" and "final tax loss selling". we'll see. and that 401k doh is sure to come in now so they say...i'll stick to the chart for now thx. so what needs to happen? combining the two charts, we need to see a piercing candle tuesday, this keeping in mind with the weekly potential bull scenario,(and possible support level across them tops) i'm not sure how the weekly will turn on a dbl bottom test in regards to losing its potential divergence. i think any week we start to lose that last fib could spell more trouble.
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looking at the sixty, i've fibbed the move from dec 11 to the lows, the bounce that occurred so far i would classify as weak, two attempts to break 2493, the lower green line, .38 retrace have failed. it also ties in pretty closely with where the weekly fib stands. note also we have lost the .23 level and uptrend as well. we currently stand in an oversold condition which could lead to a bounce. you can see the apexing occurring over the next few days, the last of which is around 2412. so watch for that level to negate friday's candle, followed by further confirms in the larger timeframes. each direction currently has the potential for a nice sized move when it decides which side of the apex it wants to maintain.
depending on holiday acitivities, a list of stocks to monitor to assist in the scenario may follow, as there were many failed downtrend breaks friday on some ndx flyers
milesov |
