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Weekend Update…

By Red, on July 31st, 2010

MONDAY Video Update…

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Bullish or Bearish?

While the jury is still in determining the market direction from here, I’m leaning bearish at this point.  However, I do see Monday as an UP day, but after that I think the overall week will be down.  For the upside, I don’t have anymore short term prints except the 111.28 spy print that I posted Friday.

Since that was an intraday print, it should be hit within 1-2 days… meaning Monday, (since it failed to hit there on Friday).  That would also be right at the falling channel’s upper trendline (shown on the 60 minute chart).  I don’t have any other upside prints except the longer term print of DIA 118.16 (about 11,800 Dow), which is a long ways away right now.

But on the downside, I have a short term print of 107.12 spy from a week ago, and Anna caught it again on the intraday chart on Thursday, further confirming the accuracy of the print.  The level she seen was 107.35 spy, so I’m pretty sure we will see that level next week some time.

On a longer term, I have the Dow 8300 print from several weeks back.  So when will that play out?  If that weekly chart rolls over next week (which could happen if we close down around the 107 level next week), then we could hit that low within a few weeks.

I don’t for sure yet, as until the weekly chart rolls over (the daily too of course, and I expect that to happen early next week on it), it’s still possible for the market to go up more.  But, I’m 70-80% bearish for next week, and I do expect that 107 FP area to be hit before next Friday.

At that point, I’d need to look at the charts again to see what the weekly chart does.  Again, if it rolls over, the market is toast!  That 8300 Dow will be upon us before the end of August.  And, there’s enough important data coming out next week that could easily cause the sell off to happen.

On Tuesday we have Personal Income and Personal Spending, which will move the market one way or the other.  On Thursday we have Continuing Claims and Initial Claims out, and finally Friday has the Unemployment Rate, Hourly Earnings, and Consumer Credit… all are “market movers”!

There are plenty of reasons to blame the sell off on next week, as I really can’t see all of those reports being positive and causing another move up in the market.  This leads me more and more bearish, as I just don’t think the weekly chart has enough juice left for a breakout move to the upside.  Especially now that the daily has ran out of steam too.

So from a technical point of view, the weekly and daily charts are running on empty for power now.  I’d say they’ve used up 90% of their juice, and could roll over at any time now.  The monthly is still bearish, and only took a “pause” period last month, which still didn’t do any damage to the overall trend down.

And of course from a “news point of view”, next week could scare a lot of bulls from staying long.  We all know that the market is manipulated and 100% controlled (you should know that, if you are a regular reader), which means they could make all the reports look positive, by getting out their erasers and changing the data.

But, they also follow technical patterns too… especially on the larger time frame charts, as they are just too hard to manipulate.  The intraday moves don’t take as much money to control, as turning around the Titanic would (meaning the monthly charts’ down trend)!

Ok, so Monday I’m looking to go up to that 111.28 print by the close.  Then I’m looking for the 60 minute chart too have peaked out, and the daily to get even closed to have a bearish cross on the MACD lines.  Since Tuesday starts out the week with the first of many reports that can move the market, I’d expect that to be the start of move down toward our 107 area FP.

The market moves fast on the way down, so who knows how fast it could hit that target low?  Bad news on Tuesday could cause us to hit that level before the Thursday news, because traders will be selling in fear that the job’s data will be horrible.  The old “buy the rumor, sell the fact”, or in this case… “sell the rumor, MAYBE? buy the fact”.

That’s my crystal ball reading for next week…

Red

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Uncategorized   DIA, DOW, SPX, spy, stock market, stock market forecast, Weekend Update  
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