As expected, market is following a script of steady rise with hiccups so far. Recent international "game of words" caused this hiccups but will it turn into a severe cold!!! Let's take a look at few charts... BPNYA is well below EMA(30) and dropping rapidly, while volatility ($VIX) has spiked causing market to take a drop. Market should find support near 11600 area and possibly turn out assuming the "war of words" will be handled diplomatically rather than military action. Daily NYSE chart shows various divergences prior to this drop, however the pullback so far is inline with normal pullback and does not appear to be worrisome. Weekly NYSE shows that RSI is still above 50 mark, however MACD is displaying divergence. Market has a solid support near 11200 area if 11600 area support breaks through. NYUD chart is a bit worrisome considering RSI is showing divergence. If RSI drops below 50 mark then there is a possibility that this market might pullback to 11200 area which in itself is not an issue as its normal BULL market pullback. No signs of worry from below McClellan index so far. All signs suggest that this pullback is normal considering market had a good run from beginning of this year and needs to dissipate extra energy before the next run higher. Considering international politics, we should be cautious as any military action will panic markets.
market remains bullish but be cautious... Comments are closed.
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