Market commentary for 02/23/2009
Good day!
NOTE: next 10 days my site will be at http://www.pop35.com.hr/ I will be there until my official site will back (they said about 10 days). Thank you all for understanding.
The financials are still in control. With the financial index at an all time low and the threat of the C, BAC and WFC being nationalized the markets followed their lead and fell to new lows. These rumors continued and the market followed. The housing solution plan was met quite tepidity and now we are in a wait and see mode. The stimulus plan was signed and that will just take time as well.
The question remains, did the market hit bottom? I’m not sure about that. If the indices break above Friday's high that will be a signal for a daily correction (next resistances will be 10sma and 20sma), or if they break below Friday's low that will be a signal for continuation to previous lows. We can see on the SPY and the QQQQ daily chart that both have room for more selling. Also the CCI is not in oversold area.
The DIA is already at new lows and has some room to reach the $70 number support area. I think the indices still have room for more selling in future days or weeks. It does not mean the monthly support will not work, but it means we could see slightly lower lows on the weekly charts and then another bounce line after the November lows. It will also be a double divergence setup for the SPY and the DIA on the weekly charts. One thing is for sure, trading risk is very high risk now, Market is very nervous and the daily doji bar on the DIA and the SPY chart is telling us about indecision. The 15 min charts are giving us an opportunity for a nice bounce. I’m not interested in new shorts and my focus will be on long trades. That is because we could see strong bounce anytime, something that we see on the 15 min charts we could see on the bigger time frames and I don’t want to be in the short trade in that case. On the other side I don’t want be too aggressive with longs before they prove out. I will follow 15 min charts. Here is the SPY example.
This is a book reversal pattern (phoenix) and a possible continuation will lead to daily correction which could hold for several days (until 10/20sma resistance area). If that does not hold I will just wait for another opportunity for a bounce. Conclusion is that I’m focused on the 15 min phoenix setup and long trades. In case that doesn't happen I will stay away and I will wait another reversal opportunity. If we will see a bounce I will look for 10/20resistance area on the daily charts. For now it is too early to see that lead to a daily trend reversal or just another correction before a new selling wave.
Good day!
NOTE: next 10 days my site will be at http://www.pop35.com.hr/ I will be there until my official site will back (they said about 10 days). Thank you all for understanding.
The financials are still in control. With the financial index at an all time low and the threat of the C, BAC and WFC being nationalized the markets followed their lead and fell to new lows. These rumors continued and the market followed. The housing solution plan was met quite tepidity and now we are in a wait and see mode. The stimulus plan was signed and that will just take time as well.
The question remains, did the market hit bottom? I’m not sure about that. If the indices break above Friday's high that will be a signal for a daily correction (next resistances will be 10sma and 20sma), or if they break below Friday's low that will be a signal for continuation to previous lows. We can see on the SPY and the QQQQ daily chart that both have room for more selling. Also the CCI is not in oversold area.
The DIA is already at new lows and has some room to reach the $70 number support area. I think the indices still have room for more selling in future days or weeks. It does not mean the monthly support will not work, but it means we could see slightly lower lows on the weekly charts and then another bounce line after the November lows. It will also be a double divergence setup for the SPY and the DIA on the weekly charts. One thing is for sure, trading risk is very high risk now, Market is very nervous and the daily doji bar on the DIA and the SPY chart is telling us about indecision. The 15 min charts are giving us an opportunity for a nice bounce. I’m not interested in new shorts and my focus will be on long trades. That is because we could see strong bounce anytime, something that we see on the 15 min charts we could see on the bigger time frames and I don’t want to be in the short trade in that case. On the other side I don’t want be too aggressive with longs before they prove out. I will follow 15 min charts. Here is the SPY example.
This is a book reversal pattern (phoenix) and a possible continuation will lead to daily correction which could hold for several days (until 10/20sma resistance area). If that does not hold I will just wait for another opportunity for a bounce. Conclusion is that I’m focused on the 15 min phoenix setup and long trades. In case that doesn't happen I will stay away and I will wait another reversal opportunity. If we will see a bounce I will look for 10/20resistance area on the daily charts. For now it is too early to see that lead to a daily trend reversal or just another correction before a new selling wave.
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