Sunday, August 22, 2010

Approaching support but overall bearish

The major indices are approaching major support levels. This might result in a short term bounce in the markets but overall, the charts are undoubtedly bearish and any bounce might be nothing more than a good shorting opportunity. There is simply just too much overhead resistance right now for the market to make a significant bounce unless there is some major (and surprising, I might add) bullish news.

SPX - Only positive for the bulls is a developing positive MACD divergence, increasing the likelihood of a short term bounce. 

NASDAQ - Approaching major support levels as marked.

DJIA - The increasing trendline has now become resistance. But lots of other resistance before that to worry about. I just like good ol' fashioned TA working well in the sense that the index got rejected of this trendline twice.

Russel 2000 - The hammer formed on Friday is again signaling a bounce but again, the overall chart is bearish.

It's been a busy weekend for the blog with posts on sector analysis, the best and worst performing industries, analysis of the U.S. dollar and gold miners. Hope it was of some benefit to you readers!

Take care and good luck for next week!

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