What a turn around!!! Last Wednesday things were really looking bad, for markets it was make it or break it. Thursday afternoon in Europe, ECB President Mr. Draghi re-affirms that any necessary actions will be taken to save EURO, especially when Spain bonds interest rates were rising. AND then a major reversal, US markets gaped up crushing anyone who was shorting this market. The momentum continued into Friday and now we are back in the game!!! What to expect next? Is this BULL rally for real!!! BPNYA index chart below clearly shows, how close it came to crossing EMA(30) from above (which would have triggered SELL signal) but turned around in time. Volatility seems to be heading lower for now, however next week will tell if this rally is for real or just another BULL trap! Daily NYSE chart tells us that market has technical broken July HIGHs where it might consolidate for a day or two before heading higher to 8100. However next week we have key economic releases, FED meeting disclosure on Wednesday, Spain holds bond auctions on Thursday and Unemployment report on Friday. All these events will decide if this rally is for real or mere a trap, in short expect more volatility... Weekly NYSE chart shows how market is moving in a triangle pattern and break of this triangle on UP/DOWN will determine the next market direction. Probability of breaking this triangle to downside is lot more than to upside, WHY?
What should we do?
What about Investments!!! 401K/IRA - Stay invested for now and our history teacher will guide us appropriately Stocks/ETFs - Take partial profits and have STOP LIMIT for your open positions For now enjoy the party till it lasts... Comments are closed.
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