The next week should be quite telling in terms of the markets direction. As you can see, we've hit the index's downward sloping trendline for a second time. This is the first of several key hurdles that stack up at around the same level.
This current 2070 level not only needs to manage to pierce the trendline, but also has to move past this level which has provided key support and resistance going back more than a year (horizontal ray). There is additional resistance that was hit more recently at 2080. I think it is unlikely that the market can break through those three barriers (trendline, 2070 past resistance, 2080 past resistance) on declining volume with an oversold RSI.
Were it not for the fact that volume has been declining during the markets recent bounce, I would say you could flip a coin as to whether we're going up or down. But low volume with an oversold RSI makes me think it is most likely that the market stalls out, and we drop rather quickly back down. Finally I would note that oil prices appear to be sliding rather than maintaining their position.
More bull is certainly possible, but I think its more likely that the bears may be in charge now.
This current 2070 level not only needs to manage to pierce the trendline, but also has to move past this level which has provided key support and resistance going back more than a year (horizontal ray). There is additional resistance that was hit more recently at 2080. I think it is unlikely that the market can break through those three barriers (trendline, 2070 past resistance, 2080 past resistance) on declining volume with an oversold RSI.
Were it not for the fact that volume has been declining during the markets recent bounce, I would say you could flip a coin as to whether we're going up or down. But low volume with an oversold RSI makes me think it is most likely that the market stalls out, and we drop rather quickly back down. Finally I would note that oil prices appear to be sliding rather than maintaining their position.
More bull is certainly possible, but I think its more likely that the bears may be in charge now.
