Longer-Term Market Trends Message Board

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Strategies & Market Trends : Longer-Term Market Trends

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To: ~digs who wrote (2323)	9/19/2010 7:51:34 PM
From: Hawkmoon	of 3209

I think we're seeing a similar repeat of what happened last spring before the flash crash. The market was signally overbought for awhile, but the HFT boxes just pumped it higher.. Then CRASH!! Looking at this SPY weekly chart (100 week MA included) you'll see that it's seldom traded outside of it's weekly Bollinger Bands for very long. So that means, lacking a major gap-up from this weekly BB pinch that is forming, upside is limited to SPY 1150: bigcharts.marketwatch.com The Weekly MACD is also reaching the level where it was previously before it rolled over. What I find interesting is that on one hand, we have the complex H&S formation with an extended right shoulder that could indicate a major move to the downside. But on the other hand, looking at a shorting time frame, we could be setting in a reverse H&S which, if it breaks out above these levels would penetrate the neckline resistance. Something else about that weekly is that it seems to reflect a Bull Flag/Pennant formation, which is on the verge of breaking out.. The reason I suggest that is because while the weekly appears overbought, the monthly suggests we're still bouncing off an oversold condition. bigcharts.marketwatch.com And the monthly, unlike the daily chart, does NOT indicate a bearish divergence in the Stochastics. Will another Flash Crash happen? Boy, one would like to think no.. I'm pretty much sitting on my hands right now looking for a trend breakout/breakdown. Hawk

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