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In my last post
I said I thought the following week would see a continuation
of the Volatility, which is what we got.
The short-term
Trend remains down, as seen by this 30-minute chart of ES, the
S&P Index Futures.
Stepping back to
the S&P Weekly chart, we see that the week hit its high at the
junction of the 5 Week Moving Average
and the 10 Week Moving Average.
But that was early in the week. By Friday we Closed on the
low, halted by the 30 Week Exponential Moving Average,
the same place we bounced from 7 weeks prior, albeit from a
lower point. Note that we still have not yet Retraced down to
the shallow Fibonacci 24% line,
which means the Pullback, in the context of the overall
Uptrend, is currently only Minor. And I could easily add, not
especially aggressive.
Having said
that, also note that the last 6 weeks have been in a Trading
Range that has been unable to break back to the upside for a
test of the high. We could still say we are in the low end of
the Range, but the troubling aspect is that the highs of the
last 6 weeks are "lower highs." What we will be watching for
now is a Bounce or a Break of the 30 Week Exponential
Moving Average, and then a possible, or should I say,
probable Target of the Fibonacci 24%
line. From that Fib line, if we
Bounce to the 30 EMA and fall back, we would see that
as a Confirmation of the lower high, as well as the formation
of a lower low. In such a scenario the
Fibonacci 38% line would be the next Target down.
The QQQ Weekly
chart shows a very similar scene, with the low hitting the
45 Week Moving Average for
the 3rd time in 7 weeks.
No, I'm not just
copying one chart and renaming them
 . The Dow Weekly chart
shows the 3 Indexes all conforming to the same pattern.
The Dollar Index
has done well this year. Is a strong $ good or bad? Depends on
which side you are on. One would assume a strong $ is good for
the consumer, yet Inflation is rising. But then, "strong" is a
relative term, considering how week it is from a year ago.
I'm expecting
some more big swings or moves during the first part of the
week, and would not be surprised to see a test of the
Fibonacci 24% lines. Until proven
other wise I will assume that is one of my weeks Targets. I
will also not be surprised to see a dip below that to some
minor horizontal Support levels. In either scenario, I would
expect some kind of Test back up to the low of this last week.
Just guessing,
of course, but that's what I do! If the news gets especially
ugly this week, which is most certainly possible in this
environment, we could hit my Intermediate Targets much sooner.
Have a great
week. Be careful out there.
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