Last post looked at the monthly charts, now zooming in to look at the weekly charts.
First the headline index Dow Jones Industrial
Remember the downtrend on the monthly shows it in perspective - the odds favour a deeper correction.
1. Bear market rallies are usually very strong rallies
2. The chart shows the down trend within a channel - prices reached the lower boundary - so the market was ripe for a reversal
3. The action (so far) is still contained within that channel
5. There is still room to the upside to reach the top of the channel.
6 if this is just a short term bear market rally then I would expect prices to turn down again NEAR the top channel
7 A significant break above that channel and we may visit 24236 (see previous post)
May have been premature in discarding the 24236 target
Stopped out of all short positions on Friday - for profits
flat and watching
expect rally to continue to at least top of channel and possible larger correction in which case 24236 on the cards
What about the other markets?
DAX weekly
Similar channel
DAX has been showing relative strength vs US markets - has come close to the 10220 target (10275 low)
shaded areas show potential Fibonacci targets for a correction of down trend
Elliott wave - could be starting a wave 4 (up/sideways ) 4's can be very difficult to trade - lots of whipsaw
FTSE weekly
Also in a channel
last post highlighted that it was reaching obvious trend line support
Nasdaq 100 weekly
Also in a down trend - but nearer to breaking out
if it does targets next trend line 6750 ish
a turn back down here likely sees new lows
CONCLUSIONS
Markets still in down trends but all rallied near bottom of the channels
May be a sign of short term trend change to up (6-7 days)
Anything larger may mean bigger upward move
Be nimble and don't get married to short side
Volatility will still be present
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