Coming into today commodities and equities have given up a bit of yesterday's rally and many are sitting at or near the bases of their consolidation rally trendline from this week. On a 15 minute chart the stock indexes and other markets have tried to establish an uptrend and bullish patterns since their open off of this base to facilitate a rally, and while stocks have had a little more success today than others, many have not shown significant upside. The question of the day is whether the people sitting long are willing to go home over the long weekend with their positions or if the market will break the base causing what I believe should be further long liquidation, and potentially massive. With Stochastic indicators giving buy signals earlier in the week to the trend followers, cyclical traders adding longs as they believe the market should rally into the spring, and funds getting back in the market long again after liquidating two weeks ago I believe that there is new ammo for this large liquidation in the near future.
This intraday rally may occur as money looks to protect it's position with a place to buy against. However, the breakout of some of the currencies below this consolidation rally is a telling indicator as they have front run most of the large equity and commodity moves this year. The market must continue to rally to hold this base that it has built and new money does not seem to be buying that. Large flag patterns will be set off to the downside as the market extended the rally off of the timely Greece rumor that hit the market Tuesday.
I strongly recommend not going home long over the extended weekend. Unless you have inside information on a Greece over the weekend (if you do please let me know), I see little else that is going to save the market. If the breakout below consolidation does not happen today I feel fairly confident that it will early next week without the blockbuster save or new stimulus plans.
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