Since the Bearish Divergence came into play we were with the sellers with our first objective at 121.85. On Wednesday this was achieved as we just popped through here to print 121.70. Yesterday we started off at the same levels but began to rally from the off ramming home the point that the Bulls are not prepared to let this slip and squeezed out the new shorts in the market. We are on a firm note in early trade today so its a case of seeing if we can keep things going. We have placed a new Marabuzo line on yesterdays candle at 124.68 and any pullback should not get back below here if things are truly healthy.
Indicators in Play
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
A deeper penetration of 121.85 or a failure to react positively would have seen us side with the Bears in a more aggressive fashion. However, the reaction from the Bulls did come and we would only be thinking about selling if we got back below our new Marabuzo line at 124.68.
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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