The bias is still down on this time frame. I have put in a downtrend line to watch. Price ended the day at the 18 SMA and just below the mid day high. Had it broke above that high and stayed above it in the afternoon it would have been a better sign for the bulls. As it is there is a bit of a question whether we follow through on Monday or not. Lets look at the 60 minute chart.
This chart shows where the down trend line comes from. The bias is up on this chart so if we start up on Monday we could be in a move up to the 50 SMA. Since we stopped at the trend line and below the mid day high it could easily roll over from here.
The bias flip back to bullish after one day down on the daily chart is often the sign of a short term low. However, look at this chart.
IBM was taken to the wood shed today on earnings. This is a major bell weather stock and has been one of the first Dow stocks to new highs after every correction. It also has the biggest influence on the Dow with its price weighted formula. It did not stop the bounce today, but after reflecting on what happened over the weekend there could be a change of heart on Monday. I almost think the market could continue whichever way it opens up on Monday. If we start up we will be above that down trend line with shorter term charts that have a bullish bias. If we open down the fact we are under the daily 6 and 18 SMAs could be a negative driver especially with the way some stocks are reacting to earnings. The potential for a decent move either way is there.
Chart practice has been updated with WYNN the stock for tonight.
http://traderbob58-chart-practice.blogspot.com/
Have a great weekend all,
Bob
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