In my last post I talked about the possibility of a Double bottom pattern playing out in the S&P500 and the DAX lows holding in. This occured yesterday with rumours circling of a Eurozone bailout deal in the pipeline. We will find out more in the upcoming days if these claims are substantiated. In the meanwhile, there are a number of bullish patterns forming across markets for the brave. The initial trade buying at the low end of the range has played out. It is too early to say whether a genuine low is in from the Daily charts but there are some good low risk/high reward trades.
Test of the previous lows and a strong reversal on Monday. Note that a higher low has formed whilst the DOW and Russell made new lows. This could be deemed a bullish divergence. The key 1140 level was recaptured last night. Very whippy and volatile but great opportunities for traders.
Dow Jones Industrials Daily:
Test of the lows and held. This is how new trends begin.
Russell 2000 Daily:
A perfect double bottom trade off 5000. This is the heart of the crisis and if this market breaks out from here, this should really buoy markets.