Remember -- this is still a very bearish chart.
-- Prices are below all the SMAs
-- All the SMAs are moving lower
-- The shorter SMAs are below the longer SMAs
BUT --
I drew three lines to show the points where I think the market should consolidate between. Remember, the market has dropped hard.
We're at 2002-2003 levels right now. So this is fundamentally a good place to consolidate simply from a time perspective. We're also very oversold still (and will be for a bit).
2 comments:
There's something I've been wondering about in the last few weeks.
Under normal circumstances, I could see where trend interpolation could be very valuable, but with various interventions by government, is it really possible to draw any solid conclusions from day-to-day market performance?
Presumably, Government becomes another actor -- a price maker -- but this does not necessarily invalidate other aspects of the chart. Resistance or support will still be present or absent at various levels. It is just that we also have to look over our shoulder at what Big Brother is up to. This is distortionary, but not all encompassing. It certainly causes additional complexity.
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