Hmmm....let's see for ourselves.
Let's have a look at the S&P first. Well, if you see too many red lines in the charts, its because I see resistance everywhere! As I said in yesterday's post, I was expecting a bounce soon as the markets seemed oversold. Well, we did get our bounce. It bounced right off 1070 region, an area I had marked as support early last week. I am pretty pleased with the way I have read the markets recently but of course, I havent really covered myself in glory, or cash, with the way that I have played them. But I did follow my own advice yesterday, got out of most of my longs (see post below) and I am now in around 80% cash heading into tomorrow. Anyway, getting back to the chart.
Firstly - Look at the volume today!! Yes dear readers, the volume is conspicuously marked by its absence. As has been the case throughout the last 10 trading sessions or so.
So, these are what I see as the next resistance regions - 1093, 1100, 1113
and the next regions of support - 1072, 1030
The discerning readers amongst you, and I know there are many of you out there, might have noticed the absence of 1085 - a region which I had pointed out as vital last week - from both the support and resistance lists. The reason for that is simple. I kinda consider 1085 to be damaged goods now. The bulls had it and couldn't hold on to it. The bears had it and now the bulls have it again. Too much back and forth for it to be considered important right now.
So, there you have it as far as the S&P is concerned. We did have a bounce but I for one, am not impressed with it.
Let's move on to gold now. I had pointed out on Friday that gold was at a very crucial point and one could expect a bounce due to it being at vital support point and positive MACD divergence. Well, I was right. In a better part of my trading cycle, I would have milked this move for all it was worth. Oh well....I am slowly getting there. Back to the chart - the trouble is that Gold is going to face strong resistance very soon in the form of MA(50). And again, look at the volume today and in the last 10 or so trading days? Get the hint??
Moving on to oil. Again a bounce off support and now just above MA(200). I am sure I am beginning to sound like a broken record now but look at the volume!! See what I mean??!!
In a nutshell dear readers, whether you are long or short right now, I hope you are not on margin and sufficiently in cash. This is no time to be a hero. If you, like me, made decent gains in 2009, the time has come to protect these gains while chipping away at the market.
Our time for famous victories will come and when it comes, we will be fighting with the market, not against it!