Are we going higher/lower in the market?

The magical question everyone is asking is the selling over?   Last week has a huge week for all the markets.   No matter what the government did, the market kept on selling.   Friday close was very interesting.    The market made a move upwards toward the last hour after consolidating throughout the middle day.    The market did not close at the high but we did not close at the low either.
Below are the monthly,weekly, and daily charts.   We have drawn the major support/resistance lines for all three markets.    Due to the volatility, it hard to trade the daily at this time.   Therefore, we are going to look at the weekly Ichimoku chart.    For both the weekly and now the monthly, we are in a bearish sentiment.    The last time the monthly charts were bearish was back in 2002.
We know that the long term “picture” is bearish so we trade any daily chart bullish, it has to be very short term.     Some people don’t like to trade against the trend.  If that is the chase, you are waiting for a bearish setup on a daily chart.   Notice, I said “waiting”.    I said waiting because if you don’t have a short position on at this time, it is very dangerous to go short right now.   The markets are in a very very oversold position.   At some point, some profit taking will take place and the market will go higher.   The move last week was a steep move down so we may get a very sharp hard move up.    Also, it is option expiration week this week.
If you are a short term player, you are looking for a bullish trade on a daily chart because the weekly charts are showing that price is very far away from the tenkan sen.     Either price will come and meet the Tenkan Sen or Tenkan sen will need to go meet price.
SPX Charts
SPX_Monthly
spx_10_12_08_weekly
SPX_10_12_08_daily
$INDU
indu_10_12_08_monthlyindu_10_12_08_weeklyindu_10_12_08_daily
$NDX
ndx_10_12_08_monthly
ndx_10_12_08_weekly
ndx_10_12_08_daily
For EDUCATIONAL USE.    Commodity Futures Trading Comission, Forex, Futures, Equity and options trading has large potential rewards, but also large potential risk and may not be suitable for everyone. You must be aware of the risks and be willing to accept them in order to invest in these markets. Do not trade with money you can not afford to lose. This is neither a solicitation nor an offer to Buy/Sell. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this document. The past performance of any trading system or methodology is not necessarily indicative of future results. All information provide d on the Blog is for educational purpose

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