Let's look at a longer chart to put today's action in perspective.
-- The current downtrend started with a big gap down last Tuesday.
-- Prices levels out for a few days.
-- But prices started to move lower on Thursday, Friday and Monday continually moving through old lows
-- Today, prices moved through previous resistance and are now on top of all the SMAs. Prices are are above the 200 day SMA.
However:
On the daily chart, notice that prices have some room to move higher before they hit resistance (namely, the 10 day SMA). If prices hit this and then continue to move higher, we'll be in a trend reversal. However, until that happens, we're still in a downtrend.
3 comments:
I sense a change in the air. Like the aftermath of a hurricane, the damage has been done, and people are out assessing how bad it is and starting the process of cleaning up the debris and rebuilding. Bottom feeders are starting to snap up cheap real estate and rehabbing is making a comeback in my neck of the woods. Good for employment in the blue collar home trades. People feel good about Obama. Spring is always a time to feel hopeful about the future.
Psychology is the intangible makes or breaks markets. I feel an uptick is on the way. A little like the vibe of 1985.
It's going to be a different economic world after we pull out of this. A lot saner. Back to basics. Good.
Feels like a dead cat bounce to me.
Today was a Sucker Rally. Anyone who bought into it will regret it.
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