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Pointy end of the knife

Pointy end of the knife

by ScottFebruary 24, 2011

We are at an inflection point. The whole bearish thesis relies on us making lower highs and lower lows. Unfortunately, the internals arent weakening, but strengthening, and each successive push down is gaining less and less ground.

Its clear the market is not happy going down, which is always a prelude to the larger trend kicking in.

Right here we have a move up, which first stalled at the 20 EMA, then that EMA became support. Right now we are butting hard up against the 50 EMA. If we breach that support, the squeeze effect should be enough to push us to the daily highs, which *should* cause a bigger squeeze and get fresh longs on board.

Its worth watching es futures for the next few hours of European session open. It gets decided here.

If you are watching now that 60 min Hammer candle at the end is a *very* high probability trade on break of the high :)

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