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$OEX charts

The Market has turned decidedly bullish late last week.


A slew of way-below-the-expectation data, ranging from consumer confidence, new home sales and unemployment claims gave the bears the initial edge but the bulls quickly took over.  Last Friday, $OEX (S&P100) plunged to an intra-day low of $498.51 before closing near the high of $505.35.  That itself is a very bullish intra-day reversal.  The $OEX has plunged earlier in the session and the selling has dried up.  It seems like the market is extremely comforted by the assurance that easy money will continued to be supplied.  Every man and his dog knows that "the Fed Fund rates will be kept low for an extended period of time".  The other contributing factor is obviously the bail out of Greece.  I find that the gauging of sentiments is more important than the actual fundamental in question.


The re-testing of the $480 did not come at all, at least not for now.  I re-looked at the Weekly and on hindsight it is now obvious that the Divergence on the weekly has not yet happened.  For the Bearish Divergence to happen, the $530.74 level has to be breached with a more shallow histogram.  $OEX is last traded at $510.33 and that is a lot of distance for the bulls to cover and therefore cannot be accomplished in a few days.  If you look carefully, the bearish divergence on the daily is a pullback to the value zone on the weekly.





That is why I have made this my bread and butter setup trade -- even if I'm totally wrong in my market direction, I still make decent money every month.


This post first appeared on A Boring Way To Make Consistent Profit From Tradin, please read the originial post: here

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$OEX charts

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