Market is flip-flopping around and seems pretty directionless. I said in an earlier post that a top is in the process of building. Since momentum to the upside has been strong and relentless to the upside the last 6/7 months one cannot reasonably expect it to just flip to the downside without a fight. One can probably imagine the market/momentum as that of a large tanker - once momentum in a certain direction has been built it takes a fair amount of time and distance for it to stop. Apparently tanker engines are switched off kilometers before ports are reached!
If one looks at the ALSH it has reached an area of strong resistance which previously provided very strong support - since that line in the sand has now been broken - it is NOW very strong resistance. I feel this will contain the advance and will be the point from which the next decline will start.
Looking at the FX market an interesting pattern is emerging. USDZAR seems to be basing and fighting to gather upside momentum. Remember for now the relationship is USD up = stock markets down. (Of late this relationship has been dis-proven at times though.... keep em peeled... )
I'm still sitting short after lightening my exposure somewhat in the past week. Lets see how things pan out this week which is nearly at an end.
Careful is you are long you might just soon be wrong!
Good
Trading
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