Thursday, June 9, 2011

Short Term Crossroads

Markets rebounded today, finally breaking a multi day sell-off. A rally is likely due to either: resume the major uptrend or to relieve a relative overbought condition. Failure to rally here would likely raise the level of consternation to levels that could precipitate a panic selling scenario. VIX is behaving for now.

Gold has retraced 78.6% of the May 2-5 decline. A rally above $1560 would suggest higher prices.

US $: See Euro FX comment below.

XLF SPDR Financial
  • XLF has retrace 61.8% of the August-Feb. rally and the RSI is in oversold.
  • OBV has dipped below the support line--a bearish indication
  • XLF held the 120*--fell through 180*, so if the 61.8% does not hold prices may find support at $14.50 level (240*).

  • possibility of a counter-trend rally is in place: the red diagonal resistance should hold a rally if the market is about to reverse major trend from up to down.
  • RSI touched over-bought and has turned down.
  • DMI (ADX) has signaled a potential secondary top.


Chartrambler said...

excellent charts !

Fibocycle said...

Better bounce soon or there could be a panic