Wednesday, August 17, 2011

Technical Picture - Low Volume Contraction Precedes Expansion

This week's price/volume contraction pales in comparison to last week's wide range, interim bottoming formation. However, contraction precedes expansion, and after three days in a tight consolidation, I am expecting expansion very soon. Tomorrow's loaded economic calendar might propel price expansion one way or the other, or not. Watch for reaction to initial claims and CPI in pre-market as well as, existing home sales and Philly Fed at 10:00.

From the two 60 minutes charts of the SPY (above) and the QQQ (below), we note that the price action is constructive - basically base on base. As long as the RSI holds 40 as support, we can look forward to continued recovery - target the ambush zone 62% fib. retracement and bearish gap resistance.

1 comment:

astrofibo said...

SP500 Reversal…