The Greed of Goldman – Market Analysis for 19th April 2010 by Singaporeseeds

GS

Thought I should analyze the chart of Goldman Sachs since they were leading the entire market on Friday. They should have seen it coming to them.

Weekly Chart of GS


On the weekly charts, the tank brought GS to below the important 50 and 200 weekly moving average. Just scroll back and observe how well GS reacts to it.

Daily Chart of GS


The huge tank on Friday brought GS right below all my moving averages. There’s a strong support at 160 which may take a few attempts to break. We might be seeing a bounce on Monday to the resistance range from 165-168 as indicated by the 50, 200 and 1000 day moving averages. I do not think GS will be able to rally above these levels and will continue the tank to around the 140 price level.

DOW

Weekly Chart of the Dow


Daily chart of the Dow


The Dow breaks out of its psychologically important level of 11,000 on Wednesday and then forms an evening star by Friday and is right below the 1000 day moving average. On weekly charts, the Dow forms a doji right below the 200 week moving average.

S&P500

Weekly Chart of the S&P


Daily chart of the S&P


The setup for the S&P is very similar to the Dow. Bearish doji right below the 200 week moving average on the weekly charts. On the daily charts, an evening star just below some significant trendline resistances that I had in my charts since Jan 2010.

Weekly Chart of the Nasdaq


Daily chart of the Nasdaq


The NASDAQ is looking least bearish of all though the Fibonacci retracement levels are indicating that there may not be much bullishness left.

Conclusion:
I believe we had just seen the top of the markets and we are now at the beginning of the correction. On Monday, we might have a bounce for the 3 indexes that should not go beyond 50% of the tank on Friday. However if we manage to break above the previous high that we had establish last Thursday, then this reversal signal would then be a false one and we will continue to rally.


Crude Oil

Daily chart of crude


Quote from my market analysis of Crude last Friday:
“Crude recently broke it's previous high and resistance at 82.50. It broke and came back to test support on Tuesday and rallied over the last 3 days together with the S&P. I have a first target at 87.15 which it is at now. The next 2 targets are at 92 and 96.70. However seeing the bearish divergence that crude has made for this last rally, i do not think it should be able to break even my first target level.”

Crude spent the whole of Friday tanking. It should continue to tank until its first significant support at 82.50. I believe crude will trend down over the next few weeks until support at 71.