1. This week will be volatile to both sides which is indicated by plenty different aspects. First of all we are quite oversold short term and have almost reached our near term target of 1245/50 . Second point is the total Lunar eclipse in Sagittarius in contrast to the Solar eclipse which started the sell off on 1 May together with Neptun going retrogade one day later – we have now a Saturn going stationary and direct again which should mark the end of wave 3 down give or take a few days in combination with the Solar Eclipse.
I see two scenarios optional to each other how the market plays out in both we ultimately will go lower – the difference is rather the short term upside potential. In scenario one we have a brief rally to the 1290/1300 level within 2 weeks before dropping lower but the shorter the recovery the less the downside potential gets for further declines.
In the second we play out a Head and Shoulder like price move as the 1250 level in broad terms might serve as the neckline tested this week and again in 2-3 weeks wave 5 down and fail to make new lows triggering a recovery up to the 1330-50 level for another 4-6 weeks before a drop to our 1150 target should follow. This is all within 2011 longer term the picture looks even worse.
Short term plenty sentiment indicators have dropped to oversold levels and some are rather bearish which supports the assumption that a bounce is due starting some time this week or early next week.
|MONDAY, JUNE 13, 2011|
INVESTOR SENTIMENT READINGS
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