It promises to be an interesting week ahead. MA(50) is the overhead resistance in all the market indices. I don't expect the bears to give up that easily whereas the bulls were impressive last week even in the wake of some negative news. No matter who wins, I expect it to be a tough fight and hopefully we will have a clear winner by the end of next week. The more we go on churning below MA(50), the better I suspect it is for the bulls. I saw a lot of impressive long setups or breakouts on Friday, which is making me lean bullish going into next week. I will be back with these setups and a list of some other stocks to watch out for next week tomorrow.
S&P - I am bullish until 1085 breaks.
QQQQ - Very similar to S&P except for the bearish volume pattern.
DJI - Similar to the above two charts. Again, watch out for MA(50).
XLF - I have a feeling that if we are to go ahead, it will be financials that will have to lead the way. It would be nice to see some volume come in though.
USO - Impressive last week but an important resistance lies ahead. Watch out for it!
GLD - Nice bounce off MA(50) but again, an important resistance level lies straight ahead.
To wrap it up, its MA(50) levels on individual indices that everybody would be concentrating on next week and so should you! I will remain bullish and keep on going long until the plays stop working. Why fight the markets? And even if you are leaning bearish, why try calling the top? Better to wait for a break of an important support level if you wanna go short. As I had written a little while back - Trade what you see, not what you think.
Take care and enjoy the weekend!
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