We have just gotten a good bounce today on the S&P 500. I was thinking about a short term trade for this bounce but decide against it since im going against the tide. The trend is down but as you can see on the chart below, we are near the november ’08 lows.In fact we have breach it.
One thing i learn was that breadth oscillators can stay oversold in depress conditions for some time. MACD on the above chart shows negative divergance. This probably means we are gonna breach to lower than november lows.
When i am out of it, i will look at resistance at 794 on the index. Since its a 2% gain, the risk vs reward is not worth it. The market is there to serve and we can just see whether the mkt is telling us its going higher or lower.
Gold ETF (GDX)
Today‘s move came out of the blue. An almost 8% down move in the GDX and 3% in the GLD. I suppose, the technical indicators on MACD indicates the upside shorterm wise is perhaps limited.
You would have observed a blue rising wedge. Supports is near the 28 dollar region.
Support for GLD:
- USD 910
- USD 860