Saturday, January 26, 2013

Another Bearish Sign?

Yesterday I said there were many inverse hammers printed. Well, today brought new highs and a lot of hammers. But a hammer after a big(-ish) rally actually is a bearish sign as well. For now, the bulls are standing ground, but the bears are ready to break the house down.

Indices made great progress this week, but we're near overbought levels. Then again, overbought can become more overbought, and so on. I wouldn't short the market right away, but it's a fool's game to put on new long positions at this point. (Unless you like to gamble on an earnings trade)

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Euro, oil, metals
The euro finally broke 1.34 for solid gains. Oil on the other hand keeps trading sideways.
Metals had another bad day with silver the biggest loser. After seven days of rallying, silver lost more than half of the gains in only two days...

Have a nice weekend!

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