Market is struggling to remain near NEW HIGHs from past two weeks and appears to be in pullback mode. Ideally a small correction or pullback is normally good for the market BUT this time market has managed to extend bullish trend significantly without meaningful correction. Will this market give us a Santa Rally!!! Although, BPNYA has managed to stay above 70 mark for long, it appears to be moving down and Volatility appears to be rising gradually. This ONLY suggests wide swings in the market if volatility keeps increasing. As can be seen from below daily NYSE chart, market has broken down below MA(50) but technically near a support area (shown by dotted line), which can act as a support for a possible bounce. On weekly chart below, we get a bit of a different picture. Market may continue to go down till 9750 area before a real bounce. We mentioned below chart last week, which can provide better guidance in an event when BPNYA remains above 70 mark for long time frames. The chart suggests that as long as NYUD line remains above or near EMA(21) then market has a chance to bounce from current levels. However, if NYUD breaks down then we will have to closely watch EMA(42) line which will be key in determining if this BULL trend will continue. This week we have FED meeting which will decide fate of this BULL trend. It appears that market might make another possible attempt to make NEW HIGHs during seasonal Santa Rally at year end. BUT it will not be easy to keep it going longer in the new year.
What does it mean for our Investments?
Market in pullback mode but trend intact so far... Comments are closed.
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