Monday, October 12, 2015

Stock Market Rally To....Nowhere......ANOTHER PESKY FACT!

Stock Market Rally To....Nowhere

The markets did retest the late August lows, and when combined with the very oversold conditions, led to a frantic 'short covering' rally back to previous resistance. It is worth noting that the recent market action is very similar to that of the August decline and initial rebound as well.

While the market has rallied back to its previous resistance levels, it has also become extremely overbought once again as well. This suggests that a bulk of the rally from the lows is complete, and investors should continue to "fade rallies".

The market will need to rise above 2060, for a more "bullish" outlook to take root. The problem will be the strong level of resistance provided by the two long-term moving averages that have only crossed during more severe market corrections.

A large number of technical indicators currently suggest that the easiest path for prices is downward. The market is still confined within a more "bearish" trend, and the current rally, like the ones that preceded it, will most likely be a "rally to nowhere."

No comments:

Post a Comment