On my blog Tues May 4 – I suggested: ‘ the March 2009 bear market rally may be ending. We should get confirmation this week ‘
The DOW crashed 2 days later.
So we got the expected significant move from the expanding wedge pattern and it broke downwards thus confiming it as a broadening top – a pattern that can occur after overextended rallies.
That DOW 11,250 resistance area mentioned earlier signals the end of the March 2009 bear market rally in my view.
The uptrend on the DOW weekly chart has not gone bearish yet but I expect it to turn down.
As shown on the chart – volume increased last week – indicating selling pressure.
Next key support is approx 10,000 but it will be breached.
Target for this down leg remains 8,150 but this level won’t hold either.
The ongoing bullish warnings for the VIX index were also confirmed last week when it exploded upwards – which is bearish for equities.
COPPER / CRUDE OIL / AUDUSD daily charts are bearish and weekly charts are neutral to bearish.
Long term charts of key equity indexes continue to give bearish warnings and the March 2009 lows will be breached according to my analysis.
USD bullish warnings since 2009 on weekly and monthly charts have not changed and further USD strength and thus EURO weakness is still expected, so USD rally and EURO downtrend will continue.
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