Friday, November 16, 2012

Finally A Bottom?

Major indices all made new lows in the morning. Just before lunch, a huge bounce on big volume made all indices except the Dow trade back in the green. Key was to hold onto those gains and close near the high of day. That would make for a great hammer on the daily charts. And that was exactly what happened. There was some weakness in the afternoon, but price even surged to new highs in the last 15 minutes. To be continued...

The major indices all printed hammers or hammer-like candles. But it doesn't mean because indices print hammers, that the bottom is in. Remember what happened on 8/3/11, indices were down substantially and finally printed a green hammer. In the next three days, we lost another +10%. But since we're way oversold on these levels, I expect higher prices next week.

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Euro, oil, metals
Despite the bounce in indices, the euro was still down 0.3%. Metals weren't that hot either, silver and copper down, gold breakeven. Oil on the other hand did great, up well over 1%. I guess people are starting to worry about what is going on in the Gaza Strip.

Have a great weekend!

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