Weekly Analysis : Bullish Bias on Market
Bull still dominates the stock market last week. S&P 500 Index broke out above the upper trendline defining the falling wedge technical pattern. This should be a good signal to buy stock again. But i still aware of the volume on the buying. Buy signal can’t be confirm completely without confirmation of high volume on breakout. Let’s see the chart of S&P 500.
There are two perspective here. For the bull, we see double bottom and a broken falling wedge pattern. But if we see the longer timeframe, we can see that S&P 500 form a Head and Shoulder pattern. So the January high could be potential resistance for the index.
Now, let’s see from fundamental view. Based from Beige Book, the Fed still considers that the growth is slow. Nearly all economic indicators are showing improvement, but still not much.
Here some economic data.
There are positive growth in Housing and Construction, National Output and Inventories (especially Durable Goods Order, Industrial Production). ISM Manufacturing Index still above 50. It’s a good sign. Unemployement claims missed the forecast but still below previous month.
EUR/USD follow the stock market movement. It keep advance to higher level. It’s already broken the darvas box daily chart.
What i do in the Market :
On options, i will reconsider to place some bullish vertical spread with tight stop loss. On forex, I still bullish on EUR/USD, but right now EUR/USD kinda overbought. So i prepare for the downtrend.