I was looking at Dow Jones testing the 20d MA resistance last Friday. And, it conquered the 20d MA resistance and formed a white candle on Friday. This has been the rebound that many traders are waiting for.
It is not surprised to have a technical rebound now, as the bear has been having party for nearly 2 months, it is about time to take a break now. It has also hit the 50% fibonacci support and therefore technical analysis has been suggesting to have some technical rebound for nearly 1 week.
Where is the market moving next? Do you think that is the end of the bear and beginning of the bull?
I would only consider this as a technical rebound. The market is still dominated by the bear. I would say I am happy to see that the market crossed 20d MA resistance as there are quite a number of positive news flowing into the market. E.g. US governing is coming in to rescue the two big financial mortgage giants. Earning report has been pretty upbeat too and exceed expectation. The cruel oil price has finally retracted after the month long increase.
I expect Dow Jones to head towards the next resistance at 11,700 or 11,730 where about as the March Low then begin another round of diving again. That’s the golden opportunity to look for short counters.
On the other hand, let’s also look at the S&P500.
S&P 500 is still resisted by the 20d MA resistance and it has not broken the resistance yet. So, the overall market is till not bullish enough to have the momemtum to shot higher. If the market cannot cross the S&P500 resistance and it can actually drag the whole market down again.
So, if you like to know the overall US stock market trends. You must look at both Dow Jones and S&P500 market trends before making final conclusion.
DISCLAIMER: This information is used for learning purposes only. It does not constitute an offer or solicitation to buy or sell. You should do your own analysis on top of my postings.
