Summary for Week Ending 1st April 2006
Another week of little directional news. Even interest rate hikes were poorly received without any spectacular reaction to the news. Perhaps it was widely accepted as overdue.
Last week...
I was non-committal as to what was going on as we simply have too many signals going in either direction and its simply up to the market to sort things out and then follow what it says it wants to do.. that is, define the path of least resistance. Most of the week was more of the same from the previous week, that is, the market stuffing around around creating considerable churn and turbulence, mostly burning energy and doing little else. The most that this can signify is that stocks are being transferred from strong to weak hands, and if this is so then we may be in for some bearishness. This proposal can only be proven if the market does in fact fall, but its the most likely scenario in my eyes at present. Generally I'm slightly fed up with the market at the moment as it is continually failing to do anything irregardless of the fact that it has had plenty of opportunities to do so. For the conspiratorially minded, if it isn't doing what its supposed to be doing then the opposite must be true !
So what's happening ?
Apart from the obvious confusion with this ongoing congestion the market this week did throw up a rarity.. A triple top ! Certainly its not a big one yet but you don't see this pattern very often so it certainly caught my eye. In essence this is bearish and the market was once again banging its head up against the 1310 level. Failing does show that there doesn't seem to be enough pressure to scale past this height and instead we may see some energy leave the system whish would be indicative of the market drifting lower. The triple top usually means a faster retreat but since we had the first line of support so close to the old high, this may be expected to hold things up for a day or two. If this line (1295) is broken once more then I would expect a quick slide to the next area of obvious support and after that it would be dependent upon shape and any other external factors such as oil which would then come to bear. In the meantime I'm banking on a slide and the indications are more bearish that bullish. I should note that at this early stage its a pure gamble as we truly do not have conformation that the rises since Oct 2005 are finished, its just that the triple top is the most obvious pointer at the moment. Yet another roll of the dice.
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