DOW JOnes just did a convincing breakout above 12500 to make us a leg trip to another bull market highs! We were discussing last 2 weeks ago that DOW Jones is experiencing a negative divergence for its MACD and RSI and must pass out that with huge daily gains to remove the threat, and clearly now, MACD and RSI looks positive and no negative divergence, issue only is the very high RSI level at 87. It really needs to take a pause, and I am betting that fall to the 12500 level is a good correction for our new Market highs!
Short term, it has a very strong resistance at 13,000 level, but my Wild Guess is that we are going to high 13,200 for the Minor Wave 3 around end of May or Early June before the 5% correction.
I would like to note also that : We are now in a semi Bull/Bubble Market where we see Market Spikes of more than 1% a day (a.k.a. the start of the Bubble Market). What we see in Oil Market spikes, it can also be seen in the Global Market, This is the starting level where people tend to risk more with their trades due to extravagant money making gains, Looking for more opportunities and gains, they increase their Risk Appetite and putting more money in the market and making crazy and risky trades, thus inflating a Bubble (what DMC, SMC chart looks like). This may be just the start of the said cycle, and is months/years time to develop, so just ride with it with caution, and we might see around 15-30% gain up to next year for DOW JONES, S&P and Nasdaq.
Happy Trading!
For the Philippine Market.
I am still cautious and selling more in the past few weeks, the 3800-43xx run was really enormous but with a strong negative divergence, I still believe 4400 will be a hard to knock level, a correction to 4200-4250 or even 4100 would be healthy for our market.
http://theamazingchart.blogspot.com/2011/04/unexpected-market-4-26-2011.html
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