Due to some technical problems with my computer I will not be able to add charts to my posts probably until tommorrow. I will try to add them as soon as I can.
 | This week has put an end to a large corrective wave, which was caused by weak macroeconomic data from the United States. The decline ended up filling this late september gap and found support at the 61,8% retracement of the previous major upward move (3450-3850). On monday the market bounced off this level of retracement and gapped up again. The catalyst for the gap was again the Dow Jones, which passed through the record level of 14000 points. For the most part of the week WIG20 was range-bound between 3700 and 3780. I was expecting a breakdown below the gap level, because of upcoming weak data from the U.S., but that obviously never happened (though the gap was tested twice on thursday). On friday, the market surged on big volume and for a moment broke through the 3780 level, but at the end of the day it came back to its prior consolidation range and closed below this key area of resistance. |
 | On friday the Dow went up almost 92 points, which puts our WIG20 in more bullish stance again. Earlier this week I was already expecting a test of the july highs, which I thought was going to occur along with the foreign markets. New Dow or S&P highs have remained as the main catalyst for such event, but as it can be seen, WIG20 needs more time to gain enough strength. Staying above the level of 3780 will prove to be a solid foundation for further gains. In a daily timeframe, the market is in a strenthening uptrend, being above the 10-day moving average, which is above 20-day MA, which is above 50-day MA and has recently crossed up the rising 100-day MA. Open interest is rising also, which means that the money is coming into the market and supports increase in prices. |
If I manage to regain my ability to post charts, then I will post some analysis of our previous week candidates, to see how they performed (hopefully tommorrow).
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