A look back from March 2014 will reveal that market is moving in a zig-zag pattern frustrating both BULLs and BEARs. Earnings season is underway hence we should expect lot of volatility. Geo-political issues are keeping a lid on this market causing more grinding and lack of direction. What shall we expect in near term? BPNYA well below 70 mark, however it will take sometime to catch up with EMA(30) to trigger BUY signal. BUT if we see strong buying then BPNYA will move up quickly. Volatility ($VIX) remains in a tight range between 13-17 but manages to drift from one end to other swiftly causing wide swings in this market. However, if $VIX crosses 18 mark then be sure to see a meaningful correction in the market and be prepared for quick moves. The zig-zag from March is very visible in below chart. It seems like market is having good support near 10300 area. Also we should observe that MACD is trending down along with RSI on daily chart causing divergence. Divergence continues to be visible on weekly NYSE chart. It will not be a surprise if market makes a NEW HIGH in-spite of this divergence. This is a very unique characteristic of the market where it goes on to make NEW HIGH making everyone complacent. NYUD showing no signs of danger so far as it remains well above EMA(21) and suggest that BULL trend remains intact. However, lets be aware that recent TOP in NYUD has yet to surpass earlier HIGH which will decide if this market makes a NEW HIGH or goes into a correction. For now BULL trend remains intact, however a possibility of meaningful correction/pullback remains on the card. As long as NYUD remains above EMA(21), we shall consider it as a regular pullback which can be anywhere from 5-15% and considered good buying opportunity for BULL markets. Usually when NYUD exhibits double TOP pattern or pattern where NEW TOP cannot surpass OLD TOP (shown in shaded rectangles), the probability of correction is high. So lets be careful and watch the charts in coming days/weeks, remember this is weekly chart hence be patient.
What does it mean for our Investments?
Market exhibits zig-zag pattern however benefit doubt goes to BULLs... Comments are closed.
|
Details
What is NYUD?
What is BPNYA?Archives
January 2020
Categories
All
|