Bulls Power Thru the DOW 50ma In Spite of Eurozone Collapse Worries. FOUS4 Revival Patterns Coming Soon!
Oct 11, 2011 Bullish Stock Charts
Markets powered into the close with full force after what was actually a very boring day. We gapped open strong with lots of side ways action until the final power hour of the markets when a sell off triggered, followed by a violent rally into the close for the bulls. More madness continues intraday in todays market as you can see illustrated by the 3x small cap bear ETF $TZA . The Battle of Bear Shit and Bull Shit! Lots of heavy moves within the session that can throw you off and send mixed signals.
Stock Chart: TZA – check out the last hour of trading.. WTF
But regardless of the action within the session the Bulls had the last laugh as we closed @ highs of the session.. Making that about 1000 point rally in the DOW since the lows were in on oct 4th. Economically i have no opinion on how the markets are gonna shape up from here. Im not an economist and im not gonna pretend understand to know anything better than some guru on tv… that doesnt know wtf hes talking about either.. because no one really knows. But from a technical analysis stand point the short term trend indicators are beginning to lean in favor of the bulls. The market had a few catalysts today that say so. First off the DOW powered through the 50 day moving after today which is typically a good indicator of trend favor. Secondly we powered through the 50ma with a strong marubozu candle. Thirdly, we broke out above the short term descending trendline on the DOW chart. And finally we are pushing strong above the 13ema, of which is my favorite short term trend indication tool, as i explain in my #1 Rated Trading dvd the FOUS4 that im most confident in the FOUS4 patterns when the dow is trading above the 13ema. See the chart below
Stock Chart: INDU
Now this doesn’t mean im all of the sudden bullish on the market. I’m 100% cash right now i dont trust this market for shit. But we are stabilizing coming out of this recent chop with some strong bull power here. We’re far from a trending short term market we are still in the chop shop so overnight holds can be very risky. Plus we have earnings season coming up on top of awaiting to see what the hell is gonna happen with the Eurozone and what kind of plan they are going to come up with to bailout europe. Or if the whole system is going to fail. So despite the market looking semi-bullish here. We certainly still have some turbulent times coming up in the month ahead and heavy sell offs are definitely something to look out for on any sort of bad news.
As far as FOUS4 patterns go they have been pretty slim the past month.. But this whole sell off is great. We have a vast amount of stocks that sold off huge this past 2-3 months and are now popping off their bottoms hard. Which can typically be phase 1 of a revival pattern. So I’m definitely looking forward to seeing what kind of FOUS4 patterns start creeping up soon and we make a killing!