Above is a chart of the SPY, which is supposed to track the SPX. We have been trending higher in an ascending wedge pattern in the last 3 weeks, the rallies and pullbacks have been definitely tradeable. We expect one more iteration in this wedge, wherein we run either into the 50d or even hit the descending trendline. But one way or another, we are going to break out of this wedge pretty soon. Usually, ascending wedges are bearish (Possibly the psychology behind this is that despite, the lower baseline providing increasing support, the bulls are unable to extend the top line higher, indicating waning bullish strength)
The MACD divergences are just beginning to appear.
Accordingly, we will be looking to put on a small speculative SSO(L) position either tomorrow or dayafter, whenever we hit that ascending trendline, looking for possibly the one final gasp towards 1310 (which is our first upside target).
It is possible that the commodities will start getting attention once, these roll over. Lets see.
Good luck to you all.
Our analysis last month on the dollar was wrong. The pattern that we were looking for has been violated.
ReplyDeletehttp://maybeitsclarke.blogspot.com/2008/07/dollar.html
We will study these again to see what the prospects on the dollar are.