Bears still in control, but .... Long term pattern continued

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Derek  11 Mar 2019

Good Morning,

The Bears are still in control as all the indices closed negatively, but not at the lows of the day. I get a lot of contradicting projections. Some say that the market still has a lot of upside potential, while others call it a rally in a bear market? If not sure .... wait for the technical indicators to tell you!

I must show the strong resistance line of the S&P500 again. I am showing nine touches on the screen and plenty more if you zoom out more. The Bulls tried to make a comeback, but only managed to create a green candle where the high is still lower than the previous day's high. It also closed below the 200 day moving line to put it in Bear market territory again.

The resistance line on the graph of the FTSE 100 is not as perfect as the one on the S&P500, but very similar. It is below the 200 day moving average and with Brexit around the corner, It will battle to get above it.

The Hang Seng started its correction later than the US due to the stimulus package. It started its correction with a breakaway gap and divergence. I marked both on the graph. It is making a doji this morning to confirm indecision.

I had to show 3 graphs to prove that markets move together, but not necessarily on the same day. Corrections do create opportunities again in the market if you wait patiently.

Bank of America bounced on bottom support that was created by the gap with previous good results. Is it going to complete the M formation created by the double top and close the gap or is the first support going to hold?

JSE Technical:
I showed in the previous market review how Walgreens Boots made the pattern where a share price drops, go horizontal between two resistance lines and then drops further. Aspen made the same pattern with poor results and a international deal that does not get concluded. At one stage Aspen was -61% for the day, but managed to climb back some of the losses.

Sanlam did bounce on the 200 day moving average and has the potential to complete the W formation from the double bottom.

One does get the opposite pattern like Aspen’s graph too for a bullish move, but that has been rare on the JSE for the past 2 years. There are plenty of the negative pattern available. See if you can see the pattern on the graph of Woolies. The horizontal period was January this year and only about 2 weeks .

You must enjoy your day.
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