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Friday, September 16, 2011

Weekend wrap- listening to the bell ring.

I presume you have heard or read a phrase that the bell does not ring  at the top or at the bottom. Do not believe in it, it does. It is just like the Christmas bell in the Polar Express movie, not everyone will hear it.
 To me it rung quite loudly when the DAX after breaking down from what appeared to be a triangle printed a bullish daily candle.
With US markets holding the early August low, it was quite convincing that the bottom was in. Objectively, we still are missing the confirmation of the bottom- that would come with breaking of the thick red resistance. But that is likely to happen sooner or later.
For the SPX the picture is also quite clear, breaking 1225 would confirm the bottom as well. Just notice how both indices stopped right at the crucial resistance today. Once that happen the run to the 200 days MA seems assured.

Longer-term technical picture appears on the surface still grim though, unless 200 DMA gets decisively broken, but that's the scenario I am putting more and more faith in now.
I will post more extensive review next week, time permitting.

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