Thursday, October 21, 2010

Headed higher

Here is an hourly bar chart showing 24 hour e-mini trading.

The drop this past Tuesday to 1155 was a shakeout (red arrow) - a false breakout below the 1162 support level which defined several preceding highs and lows (lower green dash line). Shakeouts usually are followed by fast, extended moves in the opposite direction. I think the ES is now headed for the top of the trend channel I have drawn (around 1200). After a drop to support (higher green dash line) I think the market will resume its move above the 1216 level of the April 2010 top.


Adsense said...

Hi carl
im wondering if the banking sector is setting itself up for a contrarian trade . specifically BAC it tested its 50 percent retracement to just about exact sentiment is bearish , it is in the news due to forclosures and volume is begining to tick higher
there was a spike coming into the low and im wondering if you could begin tracking the banking sector and possibly touch on this stock .
i do realise that individual stocks are more difficult to track compared to the indexes yet bac is at an interesting junture in my opinion and bears consideration .
time wise maybe it just goes sideways for a few more weeks yet price wise if this is a reversal in the making the 11 dollar level should hold .

MKS said...

IMO , BAC is setting up as a decent contrarian trade, albeit with a reasonably tight stop