Short Term Bullish Conditions - May 22, 2012

The IWM robot will cover its short position at the open today and will look to enter a new long position at a limit of 76.05. It will need a small pullback toward Quarterly S1 (75.90) and Weekly pivot (75.89) to be executed. The initial stop (73.51) is conveniently located just below Yearly pivot (73.55) and the position will also be protected by a sell signal if the OB/OS indicator falls back below -90.

The large players ‘buy programs were steady and relentless Monday. With the lack of major scheduled economic news this week, we can expect more purely technical behavior in the short term and the very strong support clusters should act as catalysts for a continuation of the rebound. Wednesday will also be a double buying POMO day and liquidity should be abundant later this week to support a nascent uptrend attempt.

[ATTACH=CONFIG]14356[/ATTACH]

GDX acted much better than during previous recent bounces and experienced an orderly follow-through day to the upside to the point that the Precious Metals MF is now less than 1 ½ day away from the overbought level of +1.35%. It is certainly too late to enter safely a long position and the GDX robot is confirming the absence of statistical edges. However, the multi-pivot outlook expects no serious technical resistance before the second resistance cluster starting with Yearly and Semester S1 (44.77). In my view, pullbacks around Quarterly S2 (41.95) may provide good buying opportunities with a stop below Weekly pivot (41.17).
Billy

[ATTACH=CONFIG]14357[/ATTACH]