Friday, November 19, 2010

More Rally Next Week

There are many who would like to believe that yesterday's gain is the beginning of another leg up in the rally that began August 27 (or July 1), and I suppose anything is possible in this crazy market, but after stalling at the April high and median line resistance, the most likely next move is a correction to the lower (magenta) channel line which is now around the August high.

I suspect that we will see a little pullback early next week, more rally around the holiday and possibly into the end of November. Then a break of the September to November channel line will usher in a retest of the April/November lows. Once that level around 1170 to 1173 fails then a quick decline to the August high should follow.

If the correction doesn't continue as outlined above, then we could very see another huge runup into the end of the year. I think this is doubtful now, but this crazy market could do about anything.

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