The State of the Trend

By: George Krum | Sat, Nov 5, 2011
Print Email

Last week the expectation was that the markets need to consolidate their gains from the last couple of weeks, and that's what happened. On Friday the SP500 closed exactly in the middle of it's weekly trading range.

We also mentioned that the character of the market changed recently. That conclusion was based on the chart below:

The intensity of bullish sentiment increased dramatically after October 7th, and has since moved into the upper half of its range. Until this changes again, one has to avoid getting too bearish on the market.

MF Global, however, taught us that getting overly bullish too early can have disastrous consequences. And with Italy more prominent on the radar screen, there are no signs that the turmoil in Europe is coming to an end.

Considering the change in bullish sentiment, against the backdrop of an unresolved European financial crisis which threatens world markets, it should come as no surprise that both the bullish and bearish scenarios outlined last month are still alive. The chart below shows that we are half-way through the forecasted consolidation period:

Weekly support/resistance levels, courtesy of OddsTrader app (which perfecgtly framed last week's decline, see Nov 2nd entry) are 1292 & 1315, and 1218 & 1193, pivot line at 1240.



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

Copyright © 2011-2017 George Krum

All Images, XHTML Renderings, and Source Code Copyright ©