Summary for Week Ending 9th September 2006
The news for this week is mostly centered around the dip in the price of Oil. Settling below $70 USD, one would expect that this would provide an impetus for stocks as concerns about inflationary pressures would ease a little, however since we went up in the face of a rising Oil price, then I suppose it follows that we would maintain the counter-intuitive movements this week with a decline in stocks.
Last week...
It can said that a stopped clock is right twice a day, and that's sort of how I feel at the moment. I was right about the market having a last gasp, and things are looking good for that pattern at the moment, however the inexorable rise we have experienced coming into this was totally unexpected, so I'm not feeling particularly smug at present. After Mondays holiday we saw the market make a shoot forwards on Tuesday and then collapse on Wednesday and Thursday followed by a not entirely unexpected inside day on Friday. If we look at the competing pressures at play, we can see that the market made its final swing in 13 days and only took 2 days to collapse back to near where it all began. This in itself would indicate that whilst there is bullish intent, its fairly weak and the bears can override the bulls quite quickly.
Next Week...
I'm on the lookout for a lower swing high. If the market does rally I would expect this to dissipate before Thursday and resume the downwards march below the 1290 minor support area. If we do see a rally this week and its counter trend then expect this to be taken out within 2 days. It should be swift if we are to continue with the bearish intent. Also coming into the anniversary of the 911 attacks may also weigh on the market, however the reaction of this is difficult to predict. A small 'Up yours Osama' rally would be indicative of counter trend and I'd be watchful of a lack of follow through seeing as this is a purely emotional play. In the end, the greatest emotional effect is losing money.
|
