Something interesting in the chart that I circled each time it happened: As the cubes channel along following the 50 day moving average they break the average then climb right back up. It is logical therefore to assume this will happen a 5th time. That would give the cubes a low of say high 107s to low 108s before it turns to climb again. But then I looked at the other indicators and found a failed crossover.
This suggests that the movement will be more sideways and choppy for a bit. Look at the same indicator (that I circled) from May 18th to the beginning of June and now look above it during the same time period the candles in the daily chart. They went sideways for a while as the DI red and green lines did not cross. Now looking at this for the year, there usually is a definite crossing of the lines, both back and forth. This time there appeared to be a failed crossover.
So which is it? The thing that I do here is take the average of the two so this is what I would say for the next week: There is no upward pressure in the cubes. There will be some sideways, some drops, and one big down day and then a bounceback to sideways. In other words dont go long in anything next week. Things are going to be cloudy with a bit of rain.
Of course if Greece has a miraculous breakthrough with its creditors next week, all the above goes out the window and the markets will surge up. But again as I said before, 80 percent of the time we are in a technical cycle and 20 percent of the time we are in a news cycle. Also, upon reexamination, I dont believe Greece really has anything to offer its creditors.
Stay tuned for some informative posts this weekend. And happy weekend. You made it through another week.
Tradinginsider
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