Sunday, March 22, 2009

Simple technical Analysis

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I will be short today. Sorry, have a lot what to say - do not have a lot of time. As I mentioned before, I keep my blog running because it keeps me on the track and helps me to sort my thoughts. I have some knowledge and I share it for free. I wish I would have more time to do it...

Quick chart below would describe the main points of my technical analysis:

S&P 500 chart

The Nasdaq 100 and DJI chart are similar to the chart above:

  • My technical indicators applied to the 60-day  chart (hourly chart: 1bar = 1 hour) tell that the indexes are overbought on the hourly chart - we may see (we already started to see) a correctional down move;
  • The same technical indicators applied to daily chart as well as to higher timeframes show that the indexes still oversold in the mid- and long-term;
  • The bullish volume during the recent recovery (March 9-18, 2009) is very strong and can cause serious correction down, unless, March 6, 2009 bottom was the last drop in the recession and now we are in the long-term recovery. In this case this bullish volume could be ignored and could indicate long term change in the stock market sentiment as it was in period from March 12 to March 21 of 2003 - if somebody remember those days...
  • Do your own homework.
  • I consider that it was good time to invest in pension and I think it is still not too late. Because of the 2008 crash that was caused by financial sector a lot of good stocks are underevaluated...
  • Sdudy charts and monitor them...

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