Written by: Trader 1/29/2009 5:00 PM
Natural Gas has daily buy divergences and brok to the upside from a quasi-descending wedge pattern. Should have one or two more up days. Daily chart is shown below.
The broader equity markets did a breakaway gap to the upside on Wednesday leaving an island bottom. Then, on Thursday the market gapped down, close to Wednesday's low leaving a lot of trapped longs. So, now the momentum has abruptly shifted back to the downside so it's time so short any bounces to the hourly 20 period EMA. A true breakaway gap where momentum had shifted strongly to the upside would never had done that. Chop suey - but that's just the way the market works sometimes - its the hazards of our profession. Daily SPY chart is shown below:
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