MERVAL BUENOS AIRES(1123) Near term trend: Negative In the last review I said "the "flip side" is that we are still trading well below the important trigger of "1216". In the near short term expect a weakening of the prices if Index failed to close above 1150 or the important 1216".

In synchronization with the global markets, Merval had also seen a corrective rally since Oct 2008, netting over 48% gains. However the index is missed our threshold of 1216 by a whisker. Remember that I had mentioned '1216' as a very crucial level way back on 21st Oct 2008. Now after 13 weeks (Fibonacci number) the index is possibly failed to surpass this point & that too with a difference of less than 1 point. This could lead to clear failure of the bulls (read downtrend) in the next few days/weeks, even a retest of Oct low is not ruled out. Stop few points above 1216.

Argentina : Biggest rally since May 08

MERVAL BUENOS AIRES (1123) In the last review (21st Oct-1216) I said "Index is poised for a recovery provided able to close above 1216 i.e. first indication of strength; if this is done it could move to 1349, preferably by Oct end". The index "tanked" very next day (& also negated a reversal possibility with 1216 remained untouched) and overshoted the downside target (of 1.1k) by wide margins.

However, despite of "selling climax" where prices tends to move beyond the "technically" important levels, the index has closed exactly on 0.618% retracement level (of entire rise from 193 -Nov01 to 2354-Oct07) on monthly close chart. Therefore now the possibility of Index sustaining above 1k, at least till year end, is bright. Apart from that (index bouncing back from 1k i.e. 0.618% Fibonacci no) here is another reason for my "pending" medium term "bullish" argument. See the inlaid "Daily" chart. The ongoing rally is so far the "biggest" rally since (over 37% since low of 819) May 2008(2257), indicating much required "strength" in the bulls camp. However the "flipside" is that we are still trading well below the important trigger of "1216". In the near short term expect a weakening of the prices if Index failed to close above 1150 or the important 1216. In such eventuality, expect a swift down move retesting the important zone of 1k, which could be provide a signal of "confirmation" for medium term reversal.

Recovery if closed > 1216

Argentina Merval Index (1175):

Near term trend: Turning Positive (Corrective) Mimicking the global rally the Argentina Merval has risen over 1000% since Nov 01. Watch the perfect rising parallel channel on monthly chart. Which was broken in June/July 08 resulting a sharp cut in the subsequent months. The index lost over 51% since last October. Now poised for a recovery, provided able to close above 1216 (first indication of strength) & the most crucial level of 1349 in the next few days/week, preferably in Oct 08. Failure to close above 1216 in near future will lead to slow and steady drifting towards next crucial levels of 11k.