Thursday, April 22, 2010

Yesterday's Market

The main issue this week is will the markets hold to their trends? There is a tremendous amount of downward pressure right now, largely from the Greek situation. So far, we've held, but the futures are trading lower as of this writing....




Posted by Hale Stewart at 4/22/2010 07:38:00 AM

2 comments:

R said...

Bonddad:
If I draw the SPY and IWR trends like you drew the DIA trend then those trends have been broken, even though the prices as of this writing have not backed off appreciably. Only IWC has not broken the trend drawn like the one you drew for DIA.

Your thinking always has good reasoning behind it and I would like to understand your rationale. So --- would you explain your rationale for drawing two different types of trends, and the SPY type trend that appears to ignore prices in the earlier period of the chart.

Thanks.

April 22, 2010 at 8:54 AM
bonddad said...

R -

Good question -- and one I should have explained better.

You are correct that the SPYs and IWRs broke their trends. But also notice that neither dropped -- that is, there was a trend break but it wasn't accompanied by a meaningful drop in price. Instead, prices broke trend and then move higher again.

So -- how do we deal with this trend break followed by a continuation of the rally? We essentially state another rally from the low point of the new trend.

April 22, 2010 at 12:01 PM

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