Summary for Week Ending 17th November 2005
There isn't too much to talk about this week as the market has been going on its merry way, oblivious to everything and behaving as if there is no tomorrow.
Last week I mentioned that I expected the Old high to be taken out and this happened on Friday so the punters are quite happy to be long over the weekend. Curiously the market opened on Friday with a gap up above the previous high and then traded down to fill the gap and then finished slightly below the open. This may be a minor exhaustion here as all the breakout traders would have barrelled in on the open with all the professional money supplying the buying frenzy. Its impossible to prove or disprove this scenario, but if we see some weakness early in the week then we know that some profit taking has occurred at the old high and people are looking for a lower entry to go long once again. This kind of behavior will cause a minor corrective pattern which will look like a minor rebound on the chart.. something to be expected when the market hits obvious support or resistance.
Looking at the chart, we has another air gap swing occur this week, which is further indicative of the underlying strength in the market. Unless we see something truly bearish appear, such as a rapid spike in the Oil price, this enthusiasm should take us into Christmas.
I'll be watching how the market performs this week off the 'obvious' resistance of the old high.
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