Click for a larger image
Notice the following on the weekly chart:
-- Prices are at levels not seen since the beginning of 2007
-- All the SMAs are moving lower
-- The shorter SMAs are below the longer SMAs
-- Prices are below all the SMAs
BUT
-- The RSI is oversold, and
-- The MACD is oversold
Click for a larger image
Notice the following on the daily chart:
-- Prices have been dropping for four and a half months
-- All the SMAs are moving lower
-- The shorter SMAs are below the longer SMAs
-- Prices are below all the SMAs
BUT:
-- The MACD is rising
Bottom line: The rising MACD on the daily chart indicates prices want to move higher. Add to that the oversold RSI and MACD on the weekly chart and the possibility of a bear market rally emerges. But there is tremendous downward momentum in the market right now that may thwart the rally.
2 comments:
Not to be [too] snarky, but I do love the predictive statements of chart readers:
"[T]he possibility of a bear market rally emerges. But there is tremendous downward momentum in the market right now that may thwart the rally."
Translation: The price of oil will go up...unless it goes down.
Behold! The power of technical analysis!
;-)
Yeah, but in this case it's true. If the markets were showing any signs of leveling off, oil would probably come back up a bit (with winter approaching in the North). But with everything heading down, oil is going down with it.
Which is, sad to say, probably a bad thing in net. It's nice that gas is cheaper, but lots of other bad things taken together overshadow that silver lining.
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