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  • What to Do? What to Do? What to Do? 2 comments
    Apr 21, 2010 7:54 PM

    The plot is getting thicker.  Too many forces are now at work and thus both bulls and bears have equal opportunity to make or lose money.

    This 11,155 area for Dow Jones and the 1200 area for SnP500 are so contentious they are practically a pressure cooker.

    These are great areas for medium to long term bears to start mounting a short campaign lasting 3 to 5 months initial objective.  But the excellent earnings season and the propaganda machines are working overtime to lure in the retail investors thus short term bears are getting clubbered left and right. 

    These are the forces in favor of the bulls/bears depending on how they fight each other:

    Dow Jones:

    -     img38.imagefra.me/img/img38/6/4/21/aarc/...
    -     img37.imagefra.me/img/img37/6/4/21/aarc/...


    -     img38.imagefra.me/img/img38/6/4/21/aarc/...
    -     img37.imagefra.me/img/img37/6/4/21/aarc/...
    -     img37.imagefra.me/img/img37/6/4/21/aarc/...

    Those are conventional TAs commonly practiced by many traders (but mostly in shorter time frames such as daily and intraday charts .... I am using them longer term with weekly and monthly charts).

    My conclusion?

    For investors = Watch and Wait.  Let the  dust settles before making a big decision.

    For traders = sharpen your skills.  The current environment is not for tyros.

    Best case scenario for the bulls is the 1233 to 1257 target range with a potential for a sustained rally if retail investors get heavily involved in the succeeding weeks (still low probability since there had been no strong buying volume for months on ends).

    Best case scenario for the bears = meltdown starts this week or next week as the major technical resistances and trade setups work their magic and preferably with bad news helping to derail the rally.  Start the meltdown while retail investors are still so flat-footed.


    For the VIX, there is a fibo confluence support at 13.50 and 10.70 further down if it breaks below the last low of 15.22.  A breakdown below the major multi-year support of 15+ area may trigger a massive equity buying spree.  I will be very afraid to short the markets if VIX breaks hard below 15.22.

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  • MarketGuy
    , contributor
    Comments (3983) | Send Message
    thatnks aarc. your charts confirm my views as well.
    21 Apr 2010, 09:57 PM Reply Like
  • Aasmul
    , contributor
    Comments (72) | Send Message
    brilliant charts! You have been making some very good and interesting posts for some time now aarc. I really hope you will keep on sharing your veiws
    22 Apr 2010, 11:07 AM Reply Like
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