Trade Detective Market Sentiment –

Hi Everyone,

I’m back from my honeymoon and am going to start producing some new picks here pretty soon. I wanted to do a quick review of the overall market for August.

By and large, August didn’t provide much direction for the market; after all was said and done the market really ended up sideways. However, upon closer review there are some signals appearing; let’s take a look.

Taking a look at the long term moving average. Notice how it has gone horizontal, an event which hasn’t occurred on the DOW since the dot com bust. Also, the PPO is showing a bearish cross over and the pattern is starting to roll over as well.

Click To Enlarge

Forecast for this week

In the near term, I believe that we are entering a period known as a “5″ to Elliot Wave theorists. Even though there was a massive reversal today, I suspect this week could be an up week before see an A,B,C correction to the downside. It is possible that today’s high could signal the start of the ‘A’ correction wave, however I wouldn’t be surprise if the market tests 11,800 again before the correction starts.

Areas Of support

Support 1 – 38.2% retracement at 11,481
Support 2 – 50% retracement at 11,356
Support 3 – Swing low just below 11,000

Resistance

A very strong ceiling has been established at 11,800

Last 5 posts by Steve Warshaw

• Crude Oil in Bullish Flag Pattern - November 6th, 2009
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• SP 500 Huge Rally on 3.5% GDP Growth, but No New Highs? - October 29th, 2009
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