The fact that the Russell 2000 bounced noticeably off a spike below the 700 level and its 200-day EMA is further evidence that the indices could be ready to mount a relief rally.
In the current environment, a further wave of major selling certainly is entirely possible and Clive Corcoran senses that there is a lack of conviction behind the buyers that may be trying to mount some kind of relief rally.
Clive Corcoran will not be looking to initiate new short positions at the moment, because he thinks the relief rally when it comes could be quite aggressive.
The fact that many stocks appear to be temporarily sold out and the respite in the selling that appeared on Friday at important levels of chart support suggests that we may be heading for a relief rally over the coming week.
The S&P 500 has now retreated to the 1260 level where there is an area of previous price support and also a conjunction with the 200-day EMA, which lies just one point away from yesterday's close.
Just how long we will have to wait for another attempt at a new all-time high for the Dow is very unclear. One thing more certain is that the all-time high is a lot less imminent that it appeared to be just ten days ago.
There was little new information to assist us in gauging the chart patterns other than the possibility that the indices are in the process of consolidating in what may turn out to be temporary pullback patterns.
A lot of hedge funds are betting against the equity indices and the dollar. This seems to be an unlikely recipe for a meltdown, but it could unsettle enough fund managers with long only strategies that we may see a protracted correction.
If there is no respite in the rampant commodity sector and the dollar comes under further pressure, we may be on the verge of a major shift in sentiment.
Copyright 2024 Tiger Shark Publishing LLC . All rights reserved.
It should not be assumed that the methods, techniques, or indicators presented on these websites will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these websites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Free Festival of Traders Videos
full story
printer version