Summary for Week Ending 29th July 2006
All the more gyrations in Oil and in developments in the Middle East saw little reflection in the markets this week. After finishing the previous week on a week note this week the market did manage to shrug off all the negativity and do some climbing. sort of.
Last week...
As I said last week, things ahead are looking like a tough play, and if I'm correct about the market being range bound for a while then its simply not worth paying too much attention until we get a solid basing formation or significant signs of weakening. In the current week we saw the market go for a strong run early in the week only to see this movement compress as we approached the July high of 1280. In fact, the market high on Friday was 1280, so it will be curious to see what happens on Monday. If things are running technically, we should see resistance at this level with the market peeling off maybe 2-5 days and then resuming its run. If we are range bound or even bearish, then we have a lower double top and the market will go for another run at the old lows. As we can see, whilst in this mood, truly anything is possible, as we do not have a clearly defined trend in place. Instead e have a lot of chop caused by gusts of enthusiasm followed by squalls of fear and it all makes for a very messy market. Those long wont stay for long and those short will bail at the hint of a bull.
Where to ?
As I said last week, it will pay to sit back and see how this plays out, as any scenario has a short half life at present. The lower double top looks good, but if we see a standard counter trend then this should hold up above the 50% retracement level. Wait and see.
|
