Footsie Last Chance Saloon (D,W)
Created on Friday, 15 May 2015 00:34
Written by Austin Galt
The Footsie continues to trade as expected and the downtrend looks set to gain momentum. Let’s update the situation using the daily and weekly charts.
FOOTSIE DAILY CHART
As per previous analysis, the expectation is the final high to the bull market is in place and a bear trend is in its infancy.
I have added Fibonacci retracement levels of the recent move down from high and the first rally in a new bear trend often makes a deep retracement. In this case, price fell a few points short of the 88.6% level. Bingo.
Price now looks wobbly and I expect after one last little rally early next week price will turn back down and start to accelerate southward.
The PSAR has a bearish bias with the dots above price and we can see the first bear rally tested this resistance which held. I think price is headed for one last test of this resistance. The dots will be around 7044 next Monday and 7036 on Tuesday.
I have drawn an Andrew’s Pitchfork which should also contain price and I expect price to have one last lash at the upper channel line before turning back down bearishly.
This little rally which I expect in the first couple of days next week is the last chance saloon for those looking to short or wishing to exit long positions. After that it is all downhill in my opinion. Smackdown!
The RSI has a pattern consisting of a lower low followed by a lower high which is a bearish indication.
The MACD indicator has a bearish bias with the red line just above the blue line and is generally trending down.
FOOTSIE WEEKLY CHART
The Stochastic and MACD indicators have just made bearish crossovers indicating the likelihood of lower prices going forward.
The PSAR has a bearish bias with the dots above price.
I expect next week to see price partially consolidate this week’s bearish candle before the downtrend really starts to hit it straps.
Summing up, it looks all over red rover for the bull trend and after a little rally early next week, say up to 7030, the bears should start to dominate the scene.