1.16.2012

Europe markets behaviour next two days, before Tuesday, will be critical for the prevailing US bullish mode

Tuesday 9:33 AM
Stock picks: BAK  HL  TWO   WYNN
Monday 10:42 PM update
Europe markets was resuming the rebound from the Friday's selloff bottoms. May be markets just want to give the S&P downgrade verdict a shrug and say "We had already discounted it into the price 4 months ago. It is not new!"


Following the bullish trend in this market from Dec 21, I am getting a yelow light by the way market opened Friday. After an hour of selloff, it had been a tug of war for 3 hous, then the last 2 hours market belonged to the bulls who bought the dip.

My critical alarm-3 got tested 2 times, held, but finally bulls tried their best to pierce up through alarm-2 and sat just an inch above the alarm-1 level (128.95/128.00). Bulls reclaimed back about 3/5 of what they lost in the first hour selloff.
The way bears satisfied and let bulls made intraday higher highs and higher lows appeared to be a hope for bulls next Tuesday.

However as US markets are still driven by the Europe ones, I think Europe markets behaviour next two days will be critical for the prevailing US bullish mode this Tuesday.

My S&R boxes: [127.66 - 128.10] - [129.67 - 130.16].

Trading setup for 1/17/2012
Undecision mode to me.
Close below 128.10 will encourage bears.
Close below 127.66 might be a short term trend reversal (or at least more pullbacks ahead), for me, and any rebound next day will be short.
Close above 129.67 will add more hopes on bulls.
Close above 130.16 will maintain the bullish trend.

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