News / US Equities
We just experienced another wild and woolly week in the US market. Right after the DJIA broke the short-term resistance line that we drew (red broken line), the trading has been very volatile.
We initially reached the downside target of the first rising wedge (blue), when the index dropped to 11,770. We reached the downside target of the head & shoulders pattern when this dropped to 11,277. DJIA dropped even further than that when it reached a low of 10,732, breaking the psychological support of 11,000. Currently, we see that DJIA is creating what looks like another rising wedge. Of course, we can’t confirm this at this time since the index is still currently consolidating.
The MACD is rising, trying to reach the zero line again. This is our confirmation of the index rallying. For all other markets following the DJIA, this would mean practically the same thing: sell on rally if you have positions and stay liquid if you don’t.
Now is not the time to be a hero and force the issue when the markets have not confirmed any reversal. We still need to wait for that clear reversal signal before we can consider buying anything for the long haul.
Recommendation: Sell on rally for any positions that you hold. 
|
