TOP40 Conundrum

[_nova]

For the sake of survival bulls and bears should put differences aside. Bias in this market is my biggest enemy. I see what I see and I have difficulty believing it. We're so oversold it's ridiculous and even as a bear I'm itching to go long as we're way whacko overdue for a +1000 pip rally. The daily RSI14 is nixed man! Except, I'm pretty certain I see a flat bottom triangle on the TOP40 and right now we're in the gray zone and today's open is not inspiring any confidence in me. Look at how the DOW's triangle is playing out... doesn't inspire any confidence does it? The question (Chartist?, John?, Brazen?, YNWA?, et al?) is: Does anyone else see a triangle? Does it look plausible? Or am I imagining things? Do we bounce or not? ... that be the question

[Electrox]

what time frames are you refering the triangle to?

[_nova]

Daily charts, but it's also on the weekly and monthly charts (obviously). I generally don't draw chart patterns on shorter timeframes as they're less reliable then

[Brazen]

Nova baby, no confidence in the DOW. We're looking at 5700 and then 4000 - of course could see a bear rally, but why? TOPI harder to say and I can't see how to trade it right now. The weaker ZAR is underpinning the resi, and ZAR seems set to weaken further now. So can't short it, can't go long. Horrible.

[Wizard]

Lets see SP500 at 630 and then we can talk. We still have to price in the employument situation for friday. No rally immediatly. maybe next week.

[Surf_Rat]

I got the triangle but no break out yet I think they priced in unemployment numbers already in US .With futures closing in march could bounce to 20400 somewhere look back to december 19100 to 21800 in 8 to 9 days some people will make lots of money

[Electrox]

The Ftse is looking very sick at the moment, testing yesterdays lows. Our markets still not playing along, When it does wakeup, Either way some1 gonna win/loose big.

[Surf_Rat]

Hey we still in channel with much resistance so we could test 17700 then some one please put that cat on the otherside of the plank and bounce the animal

[#9]

We're also below the neckline in a Picaso-like H&S with the neckline at about 17400. The projected down target is too staggering to contemplate. But I also think it will rally back up (briefly?) from the bottom triangle line.

[#10]

If its a descending triangle you talk about - they tend to break down more than they break up.

[_nova]

OPPAS!!!! USD Index is making a hard assault on 89 again. If it breaks up and stays up then US futures are going to drop fast.

[#12]

Victorc be right, descending triangle is a continuation pattern. Breaking down is significant, up means nothing except the pattern is changing. I dont see it on the ALSI, but a case can be made for the symmetrical triangle which is more a sign of indecision. The symm triangle broke down, so I guess the market decided we'll go lower with international markets. I think caution is good here in case we get a backlash to test that break.

[Brazen]

mmmm anyone else feel the vague stirrings of a rally coming on?

[_nova]

I reckon so B. While oscillators don't mean much in this type of market it seems the Yanks are biting at the bit for a relief rally. US futures nicely up and the USD Index once again stopped cold at 89. If the DOW/SnP can recover yesterday's drop then we'll probably see at least a two to three day rally. But, Friday could put an abrupt stop to that when jobs come out

[_nova]

We're getting ambushed again! The USD Index is making a run for 89 again! DOW will drop just as we close. This is nuts! The USD Index is going crazy!

[#16]

Apologies to all for interjecting my amateur thoughts into this discussion of the wise, experienced traders... Nova, do you really think that the not-particularly-high VIX can sustain such a large rally? The trend that I have noticed in the past few weeks is S&P down with VIX largely constant; I interpret this to mean that the retail investors (not speculators) have been selling. They won't turn around suddenly and start buying. Will a short squeeze be able to maintain any momentum at all with so much selling pressure from main street?

[Brazen]

Good point Tim. And looks like you are right.

[_nova]

Yep, that's very likely a good point you make. The lack of a move in the VIX also means whatever options traders are out there are all heading in one direction. The way the USD is gaining ground can also not be good for commodities either unless the ZAR loses ground in lockstep

[#19]

The trend continues... Note how the S&P 500 was flat (slightly down), but the VIX was significantly down. Note also on the six-month chart, how steady the decline of the past month has been, compared to the wild swinging in October and November. What we have here is steady selling pressure from formerly long-term investors.

[_nova]

I absolutely agree Timato. I did a bit of trawling last night and saw similar behaviour in other markets to whit FTSE, DAX, CAC etc. We're probably seeing big funds quietly and steadily selling into any rallies (ie today we're going to see BIG volume if this rally continues, nice opportunity for scalps). There's no subterfuge or conspiracy going on, just normal (albeit large scale) rebalancing of portfolios for risk aversion. I think the pro's are seeing a long downsloping bottoming process coming on