Since failing at our Marabuzo line at 196.38 the Bears took control again yesterday and early trade today indicates that a test of our major support at 193.34 could well be underway. This was our low from the 22nd of January and has long term implications if breached. The Bulls will need to step up to the plate here as a failure to do so would take us out of the range we have been in since the beginning of the year. If this level were to crack the fun could well be over and a new target would come into play way down at 170.46.
Indicators in Play
Charles Dow defined a bear market as a series of declining peaks and troughs. The opposite applies for a bull trend.
A Marabuzo line is the 50% point between the open and close on a large range day where these two points are at or close to the days extremes.
Summary
We have been siding with the Bears now for some time with 196.38 capping things or being the point we would have a re think if breached. Its now all eyes on 193.34 again where we should see a decent battle. If the Bulls fail to make a show then the Bears will take an aggressive stance to establish that the party is finally over.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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