My apologies to the dissing I gave the hourly timespan in my last post. :)
This timespan has picked up the slack mightily in the last two days...
I stopped out of longs as per yesterdays post where I suggested that the first isolation in the downtrend might have been a higher swing low on this timespan. Unable to capitalise on the downside after that Stop break... I was lucky to notice price bounce off the purple trendline to set myself long again and two good continuation of uptrend signals (arrowed bracketed histogram bars, with subsequent bars of lesser magnitude on the downside (second arrow from right) and then greater magnitude on upside (third or leftmost arrow) helped keep me in the trade.
A few things to note here... The thin vertical line segments show equal measure moves in the middle downtrend. The second equal measure was not satisfied, giving some credence to strength in an up trend.
The thin red horizontal line is the area of resistance that price failed at previously and is worthy of note.
Equal measure moves to the upside (red vertical line segments), taking the length of the first wave up and adding it to the trough of the middle down wave give targets around the 4420 level, interestingly enough, around the area of the bottom of the gap created in reaction to the flash crash on 6 MAY.
Note the MACD is giving the barest hint of a rollover of the signal line and the stochastics are hard up in the overbought area.
I am not willing to short on these signals at this level yet, but I certainly am watching what's going on here as I beleive how price reacts at the targetted levels, including the very close by resistance from the previous top a day ago will be important. As stated previously I do beleive the weekly based downside is not yet done.... whether the market chooses to accept my beleif is its very own prerogative. :)
A look at the Daily...
As mentioned in last post, the Daily has been quite "giving" in the stochastic signals as of late, where tiny divergence signals at extremes are providing good clues to short term trend changes on this timespan. Yesterdays signal has so far been good...
Note Very Well though...The prevous signal to the upside was worth three days of upward gain before a drop, and despite the signal getting into the overbought zone eventually and providing an opposite sell divergence clu... PRICE NEVER MADE IT BACK to the same highs that were acheived in the first three days from this signal. I suspect on this Greater timespan that is an indication of a downtrend....
Positives... potential cross over of the signal line over the slow on the MACD moving averages. Note the question mark and arrow on the recent lows of the MACD moving averages...POSSIBLE that the smash down on the May6 Flash crash may have provided an outlier low that has to be discounted, and has messed with this indicator short term... If that is the case then we are looking at a classic buy signal potentil via the MACD on this timespan... because of the flashcrash volatilty though... I have no certainty there.
Overall sentiment...
I beleive there is still acase for at least short term upside, and it is not impossible that what is occurring on the hourly and daily are indications that the market has put in a low for the time being.
I am more inclined to buy off support for the next day or so... support on lower timespans is around the 4300 level approx 50 points down from current price.
Lower timespans are suggesting that we may well test this level today with both 5 an ten minute from overnight giving fairly strong MACD based signals for a bit of weakness intraday coming up.
Weekly timespan does not have me satisfied that the WEEKLY downside is done.
(20min delay)