Sunday, April 26, 2009

Last gasp?

We made it back to the black dashed trendline that has acted as both support and resistance through out this rally. We have been trading withing the green channel since 4/20. Having reached the top I expect a pull back in the short term. I also expect the pattern to break down out of the channel.

The weeklies on SPY are very overbought. When we turn down the correction will last many weeks.

VIX:SPX was down but held the upper trendline of the falling bullish wedge. The pattern is still intact and I expect an immediate pullback in the market on monday.