Sunday, June 13, 2010

Weekend Analysis

Friday's low volume was a perfect setup for those who wanted to push the index higher. Friday's close came in right at key resistance, and while Monday can open green for the bears it should not close there if we're still tracking a bearish count. In fact, if we close above 1090 tomorrow (and especially 1105), then I give high odds for a run to 1145 before any significant selling comes in.

I've looked over the charts at several time frames, so let's review:

Here is the 15 min chart. Everything looks corrective off of the 1040 rise. We have key fib relationships working on the down waves, which means that they are still part of one larger up wave. Fib relationships target the 1092/1095 area as heavy resistance. If none comes, then that would be bad for this count.

Here is the 60 min chart. It is telling us that we currently have 7 overlapping waves (closes above / below the 8 SMA) along with significant divergence showing up on the RSI(5). If this divergence is not respected tomorrow, the market will likely BLAST higher the rest of the week.

Here is the daily chart. Although we currently have an uptrend on the daily chart we are at a point on the RSI(5) where sellers have consistently sold the rallies since the April top. Once again I state that if sellers don't show up now, then the bulls should be able to take it significantly higher (target 1145).

Here is the weekly chart. We are still in a downtrend and we continue to be until the market gets above 1125. Will it get there? Tomorrow should be key to the forecast.

Best of luck!
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