 | Today we saw confirmation of the 20-day moving average as the nearest level of short term support. The market retested it and then bounced off late in the day, indicating a little bit of strength. Now, the situation has become more uncertain. Firstly: the latest pullback has developed on constantly increasing volume, which indicates more selling pressure. Secondly: as I'm writing this, the Dow Jones and S&P500 are deep in the negative territory, which means that both have already declined more than 1%. Two key factors coming up for this market on monday: close of the american trading session and sunday elections in Poland. |
 | So far this market has been behaving almost exactly as in the case of previous pullback in late September, which means it is declining in a channel. At the end of today's trading session, the price posted a double test of recent potential turning point in this market, which is the 'derivatives expiration day' resistance/support level. Although we saw two higher lows today, close at the upper band of declining channel does not ensure a downtrend reversal, considering current situation on America's stock exchange. I will not be surprised to see a retest of 3780. |
UPDATE: The Dow declined over 360 points on industrial companies' profit outlook, so the elections are probably not going to do any more damage to WIG20, regardless of the result. But such setback puts the 3780 support into 'questionable' state.
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