SP500 and all European stock indexes could technically start to fall down to 2011 lows any day this week. The only index which still is holding a
sideways trend with a possibility of a sustained upward trend is the DOW.
The hesitation to break down last Thursday and Friday was because of very
low activities which especially have been the case on Wall Street. Everyone
seems to wait for a sudden positive signal regarding the European debt. There
are lots of rumours about a sudden solution that ECB will get green light from
Germany to become the lender of last resort.
To make a forecast even more difficult is the fact that the
U.S. has their biggest holiday, Thanksgiving on Thursday 24. Many market
participants will leave Wednesday which practically means that Wall Street will
function normally less than three full days this coming week. Europe usually does not want to trade when
the US traders are off. However I expect the big players to sit at their
computers and with low volume send the indexes up and down without a real
trend.
My personal job right now, since we technically is at the
very edge of the drop with SP500 and FTSE, is to follow these two indexes in detail at
least the first three days of the week and Friday and report on this blog what
I see.
Remember that the big technical picture will get worse by
the day on the daily charts so any happy rumour from Europe with a powerful
rally will most likely be just that, a rally that will come back down again
quickly or after a few days.
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