Wednesday, October 12, 2011

The story (rally) continues, or will today be the reversal?

Another (exhaustion?) gap and a slow grind up brought us to the 1215-level in the S&P-futures. Here the rally stalled. While tech was leading the market once again, it also led on the way down in the last hour-and-a-half of trading and price formed a shooting star on the daily chart. Other indices forming inverted hammers, which is bearish, certainly with the oversold levels we are at right now.

Here the 5m-chart for SPY, heavy selling about 15 minutes before the end of the session.

Daily charts for DIA and QQQ below:

I tried a small tester (SPY), shorting the opening gap, but it didn't work out. Out for a small loss. I fought the trend and the trend won...
The V-type movement we're seeing the last couple of days reminds me a lot of the mid-March move, in time of the Japan earthquake. Will we consolidate/pullback and fake-out again, just like then?

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