BOTTOM LINE: Some indices took out their November highs (DJI), some are hovering around those levels, and some have retraced about 62% of last week's drop (expected), and some couldn't even manage that (Italy). On the one hand, this week is very positive, from a seasonality point of view. On the other, patterns on medium- and short-term charts appear bearish. This warrants a cautious bearish stance.
This is an hourly chart of the SP500, with projections as they were made about two weeks ago. The Monday rally to challenge November highs appears to have taken an impulsive shape, which suggests that it could be a failed fifth wave higher, as originally projected. In any case, upside is severely limited. Downside remains large.
This is a daily chart of the Italian index, and it is very weak. So far, the corrective rally retraced less than 50% of the decline last week, and thus this index is a prime candidate for a short.
No comments:
Post a Comment