Sunday, November 22, 2009

S&P 500 & HSI Weekly Preview

We kicked off last week with a huge bang and HSI actually gapped up on Monday to create a new year high by mid-week. However, on the very same day it hit the top, it began its return to mean and actually closed the week lower than previous.

Price action is showing a false break-out that, I feel, showed that the initial fervour is over. This, on top of a divergence in the MACD-H oscillator, showed some weakening in the market which should at least move some way below the value zone before attempting to rally. However, take note that this is a QUADRUPLE bearish divergence. Trade with care!

S&P 500 showed the same false breakout and the index also has the habit of moving some way below the value zone before rallying. This should come, at the earliest, by mid-week.

Last Friday & Saturday were the days options expired in the US markets. This is usually followed by a day or two of sell down. Be careful of trying, too early, to catch a short term bottom!

1 comment:

dream said...

pat, thanks for the update. it is helpful.