So, Tony asked if this sell off was bearish. I think he threw out a 50% fib retrace as evidence.
You can see the horizontal support at the 79.5, which I suspect is the rough 50% retrace. I expected more weakness today.. maybe even a sideways move, with an up bias. So what we got was Positive and bullish in my mind.
BUT... In blue we have the trend.... and we broke the trend. That is bearish.... But the rule of thumb is "It's what it does after it breaks the trend, that is important." this could turn into a bear trap below that trend.
we also could look at this as Wave 1 of an Elliot wave... and that the breaking of the trend is wave 2 consolidation. and we will get a wave 3 some time tomorrow.
Or....
That wave 3 of a down trend was yesterday,and that today was wave four of a consolidation with a spike low tomorrow.
SO that is the question... Is the blue trend Wave 4 of a downtrend, or wave one of a new uptrend?
Tuesday, March 31, 2009
Is it Bearish?
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Ugly end to the day. High volume spike lower in the last hour after an anemic low volume uptrend day.
Mostly window dressing I would presume. The objective sentiment indicators are bearish or neutral at best.
After hours the market extended the losses and E_mini futures are steeply negative.
Soros says the G20 is Western civilization's last chance, and that was before France threatened to walk out. Germany will not participate in any bailout of Eastern Europe.
The graph looks bearish and I would vote the blue trend is wave 4 of a downtrend and therefore we'll get a spike lower tomorrow... but I'm feeling pessimistic lately, so maybe it's time for a Costanza trade.
I bought $50,000 of MS after hours (kidding).
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