As expected, after a V-shape recovery in February market is taking a breather and experiencing a pullback. The key question remains, will this pullback translate into a correction or will we see a continuation of the trend. What can we expect in this volatile market? BPNYA well above 70 mark, hence it would be wise to refrain from opening new positions at this time. Also volatility ($VIX) appears to be on the rise which is dragging the market down. As expected, earlier trend line acted as resistance and market went into a pullback. At present, Market is resting near MA(50) which might act as support for the next leg up. ONLY time will tell... On weekly NYSE chart, divergence is very visible and that's a BIG concern for now. Divergence ALWAYS leads to bigger correction in very short period or in other words quick crash, either way we need to be cognizant about this fact as we SIMPLY cannot time it. Below weekly NYUD chart which depicts the overall advance-decline volume remains bullish for now which is a better sign. Market appears to be taking a breather which is resulting into a pullback after a massive run in February of this year. As long as this pullback does not convert into correction, this trend can remain intact which in turn means that NYUD needs to remain above EMA(21) and volatility needs to subside. However, we also cannot forget that we did observe divergence on NYSE weekly chart hence need to be careful. Also Ukraine issue can ignite into fireworks if not handled carefully.
What does it mean for our Investments?
Market in pullback mode hence be cautious... Comments are closed.
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