The 1-hour chart still gives us some hope with Jul low still not broken. The lower trend line of the descending channel can possibly act as resistance (but we don't bet it will hold):
The WIG20 Index looks much more bearish as it has made a lower low:
The WIG20 Index has obviously given strong sell signal, but the WIG Index still stayed above last low line. And that's the only reason why I'm not 100% bear after today's session close.
The charts above look suggestive, but we need to remember there are always alternative ways to draw them. Take a look at the WIG Index from last Friday:
I doesn't look so bearish as before, does it? The few ways of drawing current situation are the source of general confusion and that's why I would suggest to wait until we take the last high or low before doing anything. I assume the continuation of a downtrend is more probable now, but we should never convince ourselves to just one direction. We can be (and we usually are) wrong, but this is the reason why Stop-Loss order exists.
An interesting article about forecasting market direction can be found here.
Also a few words on oil - in this post we suggested shorting oil again. The oil price has crossed Fibo 38.2% and 50% and is near the 61.8% now 87.5 USD).
This is the last level, when oil price drop can be seen as correction. Playing oil right is really hard, we cannot be sure if the oil bounces or not, thus I will suggest to use trailing stop-loss instead of target profit now. The Parabollic SAR can be a good choice as we have a strong downtrend now. The daily SAR stoploss (as on chart) seems to be too costly, therefore I will suggest to use smaller periods (8- or 4-hours, but with some reentry strategy):
Sources:
[http://www.cato.org/pub_display.php?pub_id=9628]
[http://www.morevalue.com/glossary/restrict/Triple Witching Day.html]
[http://www.netdania.com/Products/ChartStation/ChartStation.aspx]
Posts
No comments:
Post a Comment