LET?S TAKE A QUICK LOOK AT OIL - DAILY CHART
I?ve been saying oil had topped. I said if this was trending down it would go to 51 and bounce. That bounce would not exceed 4 days and the trend would resume and drop to the January high. The high was on the 4th day up and it is down to the January high. a small bounce from here is possible but it looks like next support is down into the 46 level.
LET?S LOOK AT A FTSE WEEKLY CHART
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What is making this difficult is the index fell out of the bottom of a struggling trend down. That "pattern of trend" usually occurs towards the end of a trend when a market exhausts or panics into a low. This pattern has occurred directly off a high and is unusual. Considering the exhaustion high that just took place in February, a deeper move down is possible. This is a picture of the entire bull campaign. I?ve broken the last leg up into 1/8th and 1/3rd. A 1/3 to 3/8 retracement holds the trend intact as it is a normal retracement within a trend. The previous correction was 342 points, currently down 287 so 4718 is important as it matches the largest previous move down. So the current level is support to hold the up trend intact - therefor holding that low is very important. Then 50% of the range, then the previous high, which would be the normal support for the move down. If there is no low in place here and now - then the previous high from April 2004 is the highest probability for a price low. This current level is very important support to hold the up trend intact
LET?S LOOK AT THE S&P 500 INDEX
Friday was another wide range reversal of the previous day?s wide range, the last seven weeks have seen more reversals without follow through than I?ve ever seen in the past 40 years. The past 4 days have reversed the previous day I assume today will show some follow through but I am not prepared to say the move down is complete.
Our next significant time window is still the 6th of May or this coming Friday. I?ve been indicating the most bullish thing we could see is a higher low on that date. If there is a rally early in the week and it drifts down into the end of the week, then there might be a solid low in place. If we see a weak rally up into the end of the week I could get concerned. The end of this week will be the opportunity for this index to resume the trend in either direction. There are lots of volume divergence through out my stock list so I do assume some sort of rally early this week. But I cannot say this move down is complete.
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