Posted on May 10th, 2008 at 10:48 PM
In my March 18 post, I showed that the ($SPX) had set up a classic counter-trend trade on the daily timeframe. Since then, the market has rallied just under 7%.
So where are we now? We can see on the daily timeframe that if we pull back further we may set up a stochastic buy. However, it is the weekly timeframe that I am paying more attention to here.
On the weekly chart below, you can see that this little 7% rally we've had may just be a pullback in a downtrend. If we trigger short on the $spx weekly timeframe it could be a tough summer for anyone who is long this index.
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~Joel Stahl
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