Friday 7 May 2010
A picture being worth the proverbial 1,000 words, a look at a daily chart
shows what may likely be the defined trading range parameters for some
time. The top of the bar is where supply entered the market with abandon,
literally. Actually, the high from 1200 is where real supply began, but price
is unlikely to retrace back to that level.
A more pragmatic resistance area is the 1169 high, up to and including the
1175 area, for that is where previous support was broken and confirmed a
trend change, on the daily chart. One thing we know for sure, it will take the
market some time to retest either the high of the low, and the low is more
likely to be retested than the high.
The advice remains the same: Sell weak rallies.
That will become more apparent in the next week or so. We are on the
sidelines, for now.