The Dow and the S&P did an ice hole failure on hourly charts at the last hour last night. As you can see from the hourly charts, the S&P 500 failed to break above the 50 SMA in the last hour of trading yesterday.
This failure indicates that the rally had failed and the indexes may take out the lows made at market close 3 days ago. We are currently in a downtrend starting on the bearish engulfing daily candlestick formation made on Monday at I think may take us all the way to 800 on the S&P and 7,500 on the Dow.
Direction for 04/23/2009 Thursday: Down
Crude Oil (USO)
Crude and USO are showing divergence as USO had tanked below its 50 day moving average while crude is still moving more or less sideways and holding above the 50 day MA. Their respective behaviors are indicating that crude seems to be following USO although logically, it should be the other way around. However I believe both crude and USO will be going thru a period of weakness now before there can be any sustainable movement up. I am currently waiting to buy into the dips as I believe crude is currently the only one thing in the world that is still worth investing for the long term.
Direction for 04/23/2009 Thursday: Down
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