7/1/08
What a reversal trading day!! As I mentioned days earlier, Dow was formed tweezers Doji since friday close. Today, it formed a hammer which is one of strong bullish reversal candlestick patterns after significant downtrend, appeared in deep oversold territory and reverse recover from breaking lower bolinger band. But I need to see a follow-through up day for confirmation tomorrow. Financial sector got good rebound. Moreover, I am not so convinced yet that this maybe an intermediate-term bottom as VIX is not spike in Fear Zone(over 30). The above mentioned technical also happen with S&P. The stronger Nasdaq found support and had good bounce too. The S&P did find support in my said support zone 1265-1275 (today the lowest is 1260 but closed 1284). The Dow has bounce from 12200 the upper level as I told too. Here the next big hurdle for market to rebound higher is falling on the last trading day of this week. As I wrote it on Sunday, this thursday that ECB and Non-farm payroll are very critical to bring up sentiment change. Still, market sentiment has not changed in favor of Bulls yet as oil future still trade in topping area.
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