This week is a very terrible week for me.
Got stopped out on all my trades, and seems like the market is starting to show some significant signs of weakness.
With oil trading higher each day, everyone is so concern about the economy , and there's no doubt why the market shows sign of weaknesses.
Just look at the rate of increase in price. From $85 since Feb, all the way up to the current high of $135. That's a whooooping $50 increase in 3 short months. If that doesn't sound scarry to you, maybe let's say it in another way:- That's a 58% increased within 3months (90days) period. Or in other words, a 232% increase per year. Now how does that sound to you? :P
With that kind of momentum in the Crude Oil, I don't see any help with the Piercing Pattern + Oversold. There's no way to rationally predict what is gonna happen next to this craziness. The only thing that I would say is, the signs will only help in a very short term temporary pullback, and that's it. Oil will still get higher and higher.
On the other hand, gold is also starting to show some signs of recovery, but is met with an immediate resistance.
From the look of it, there isn't enough buyer to sustain the previous week's rally, as Gold is already at the overbought region now. I can foresee that Gold it going to resume it's downtrend in the week to come. Just look at how the Bearish Engulfing formed right exactly at the resistance level.
The US Dollar Index finally broke out from it's trading range after 3 weeks.
The US Dollar is currently having in indecision on whether to break or not to break. It is still not a very clear sign of downwards breakout. If the buyer comes back, this might push the USD back into the $72-$74 trading range, and put the short selling to cover back their shorts, thus, staging a immediate rally. But ..... if all else fail, then we should see an immediate support at $71 level. Breaking that level will mean disaster to the USD.
Really breaks my heart.
That's where I got stopped out.
Betting on a short pullback 2 days ago, and the pullback doesn't stop, but followed thru and penetrated the support line, which I got stopped out on all of my trades last week. Sad ........
There isn't enough POWER to push thru the 200MA.
Both attempts to break thru the 200MA was negated by more sellers.
And finally, the buyers gave up, and sell their position, which made the breakdown of the market.
Seems like 138 will be the last line of defence.
Once that is broken, I believe that will be the end of the rally which started on March. They say hoping is a very dangerous thing when you are in the market, and I'm still hoping that the market will be able to recover from this short term weakness. Of course, I have my hopes which comes with some other facts that back me up, and hopefully I'm right this time.
The 1st that backs me up is the Volatility Index.
The $VIX has been staying very obediently within a 10% range of its 10MA.
See how during the past few weeks, the price is kept well within the 2 blue envelopes?
Well, it is now touching the upper band, and I'm buying that it will stay as obedient as in the pass, and pull back.
The other fact that backs me up is the QQQQ, which is the technology sector.
Despite the obvious weaknesses shown in the Standard & Poor and the Dow Jones, there is still one major index that track the market's breath that stands above the rest, my last hope, the QQQQ Nasdaq .
So far, this is the only index that trades above the 200MA for so long.
Technology has been staging a huge comeback lately.
See the 2 small doji that formed for the past 2 days around the resistance area?
Despite the HUGE down days on the SPY and DJIA, the QQQQ only shows sign of indecision with 2 small doji, without any significant sellers.
This shows that buyers still have faith in the Technology sector, and I'm buying on that.
This will be my last wild card.
If next week sees a rebound on the $48, then this might be able to save the market, and pull the index of SPY / DJIA back to their original uptrend.
But if next week the QQQQ also show weakness and break down thru the $48 support, then I believe, we will be seeing a new change of trend, a beginning of a Down Trend.
(I'm still holding my AAPL, and am looking tightly on these few stocks, which shows strength despite the week market yesterday. PNRA, BUCY, FRED)
Seems like the Malaysia Market is having some difficulties breaking thru its 1300 level.
The 1st attempt to break thru the 1300 level has failed, obviously.
There might be more attempts to come.
I predict that it will pull back a bit, the buyers will step in again, to retest the 1300 level again.
It just so happened that the 1300 level resistance is currently defensed by the 200MA as well. This could create some problem for the bulls, as most people will stay away from buying during this period.
But, if ...... if it manages to penetrates the 1300 level, we might be able to see a target of 1425 (the width of the triangle from the breakout point).
Overall, I'm still a bit bullish on the entire market.
