We're at a very, very important point in this price action. It's very common for a break out to go back and retest the break out level. That's what we did today on the Daily chart.
We closed right on the trend line as well as the 8ema and 20sma. Now its all about where we go from here. If we close substantially lower, like under the lower trend line for example, then its more likely we'll continue down, in my opinion. If we close above today's high then its more likely we'll continue the current upward trend. Of course, its quite possible we'll have a quiet Friday and close near today's close, in which case we'll have to wait until next week to see where we're going.
There's only one economic report due out tomorrow that might move the market, but its not a big one. Its the University of Michigan Preliminary Consumer Sentiment at 10:00am ET.
If we close above yesterday's high, which is the high of this uptrend so far, that would be a very bullish indication. We're still coming out of Gartley D point, which helps with the odds to the upside, but we have bearish factors too:
- The D point is below the 78.6% Fibonacci retracement.
- We formed a Bearish Harami candlestick pattern today.
- We're below the 50sma.
- We're below the 200sma.
- We're in a larger down trend.
- We're in the 3 worst performing months of the year for equities (Aug - Oct).
The good news is our risk is limited to cost of the options. Cold comfort, but it'll be greatly appreciated if UAL takes a nosedive overnight or over the upcoming weekend.
No comments:
Post a Comment