The latest weekly chart of the cash S&P500 shows an uptrending price bar with a lower close. Our technical “buy” signal generated just one week ago has been replaced by a “sell” due to a negative reversal pattern in the RSI (see chart). Regardless of this technical development, the market reversed downward after approaching but not hitting our stop at 1362.17. The theoretical short trade generated by the trading system under development in this blog remains short from November 7, 2007 at 1489.55. The stop loss point will be adjusted after the open on Monday. The next item of note about this week’s price bar is that it is a “Reversal Week”. This occurs when the market makes a new weekly high but closes below the prior week’s close and the current week’s open. Additionally we can note that the high was right at a Fibonacci retracement of the last downward swing from February 29 to March 20. Finally we have the negative reversal in the RSI. Although the RSI was higher last week than on February 22 price was not. This formation points to a price move to at least 1264.54. And so the market; from the weekly chart perspective, seems vulnerable once again.
My roadmap for the coming week: An attempted bounce at the start of the week followed by a renewed move down. More importantly is whether the stop gets hit or not.
No comments:
Post a Comment