Trend Watch:Weekly Outlook not looking too good $USO $SPY
Good sunday to all. When it comes to the weekly charts, we haven’t get a clear signal yet.
Yes trading short term could be good for you or me, but with large amount of money to deploy alot of question is in what right now. The outlook on the 5 years chart still isn’t clear and Carl Swenlin seem to think that this is a good point that the rally might fizzle out in 1 to 2 weeks time:
Stock prices have continued to move higher in spite of broad expectations for a decent correction. Looking at the weekly chart of the S&P 500, we get a longer-term perspective. The price index is headed into an apex where the long-term declining tops line and the top of the ascending wedge pattern converge. It sure looks like a rally stopper to me. The crystal ball says rally top should be in place within a week or two.
However, he seem to identify a buy signal for USO ETF after giving a sell signal weeks ago:
In my September 25 article I headlined the fact that the Oil ETF (USO) had generated convincing sell signal, so I think it is appropriate to report that the signal has recently turned to a buy. Below is the chart from the 9/25 article showing the breakdown from the triangle formation that accompanied the sell signal. It still looks good to me, but that breakdown turned out to be a shakeout, a final decline clearing the market of sellers and setting up another advance.
On the next chart you can see how the shakeout lows redefined the lower limits and shape of the triangle. Prices rallied off the shakeout base and broke through the top of the triangle. Prices have also broken through the 200-EMA, so I think this move has a lot of credibility. Of course, I also thought the sell signal was very credible too, but we must change our opinion as the evidence demands.
Short Term:
I believe that we are going to at least correct some what early next 2-3 days. A correction of nearly 4.5% would take us back to the 50 EMA, where we will see if this ride will continue.
If you are invested in EEM do be careful cause the short term move could be 8% at maximum.
It looks like some impulsive trades that i put out on friday is gonna haunt me real bad.
Related posts:
- Trend Watch:Weekly Trend Analysis 06 Sept ‘09 $spy $eem $gdx
- Trend Watch:Weekly Updates 20 Sep ‘09
- Trend Watch:Weekly Update for 04 Oct ‘09 $Spy $Eem $Ews
- Trend Watch:Weekly Review 01 Nov ‘09
- Trend Watch:Weekly update 8 Nov ‘09 $EEM $GDX $SPY
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While the S&P 500’s seven-month streak of gains is halted in October, the consumer-staples sector continues higher, up for an eighth consecutive month for the best streak among the index’s 10 industry groups.