Tuesday, October 23, 2012

$SPX update

My previous update about the market is here . I posted my outlook in all time frames in that post, it is good to know the market is following my outlook since then. We are a mere 13 $SPX points lower compared to Oct. 14th. The market went higher in the very short term and now is going lower.

Before I go to write further, my outlook for the next 2 weeks:

  VST - Bearish
 ST - Bearish still but see signs of + divergence to turn bullish
 IT and LT - Bullish still.

I want to write more about the ST here. Look at the chart below:

Price is going lower vs relative strength is at the same level or higher right now. If this chart should turn bullish, it needs to follow rules: RSI shouldn't go lower than previous low, RSI should turn higher, then buy when price closes above daily close 1417 on the /ES. The same divergence can be seen on the $SPX as well.

There are chances that the divergence may not end up into a bullish tone but watch for the above signs and play the game - good for few days as this is a daily chart.

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