Market commentary for 03/23/2009
Good day,
Poor numbers, lousy politics, huge deficits were all in control of the markets this past week. The market bounced on the realization that the numbers could have been worse. Not much to go on in my opinion. We were able to profit from the markets this week recognizing the markets direction.
The QQQQ 60 min chart has an equal move to the previous high (now support area) which was reached. It was exactly what expected and what was predicted for Friday. The SPY and the DIA reached 200sma support area and started with its consolidation. If the consolidation above the 200sma does continue, the odds for a break down will increase. Let’s look at the daily charts. The QQQQ has some support at the 50sma area, but scrolling in back we can see the 50sma is not a big deal. The SPY and the DIA has room for more of a downside move and the first support is the 10sma. Will that hold, we don’t know right now, but the indices have enough room for a Monday morning continuation. To get a better picture it is always good to see the bigger time frame. When that chart is in a strong trend the 10 and 20sma are always important support/resistance areas. Weekly charts show exactly that. For the SPY and the DIA the 10sma previous low is too strong to be broken on the first try and the QQQQ is back in the middle of the big weekly range. After a strong bounce it is logical to expect a correction. Everything is possible, but right now I don’t expect that we will go back to the lows. The bounce was really strong, however volume was not strong. For a true bottom, it was not strong enough. We caught the top and the start of an initial move down which is very important because continuation can be very tricky in a nervous market. For Monday I expect to see selling continuation. For now pace and volume suggest for that possibility. Despite the strong bounce from low, we are still in downtrend and we must respect that. How far this correction will go, I don’t know and that will be my focus the next few days. Will the market go back to the low and a double bottom or it will form higher low we shall see. If the selling pressure continues the flag option will be canceled. For now I’m with the bears and I will go day by day. All that will be updated in this column.
News still plays a big part of this market. The treasury said they will buy another trillion dollars of toxic assets this weekend and the markets appear to going higher now Monday morning. I will continue to follow that action.
Those of you that used to come into the trading room and stopped, I want to tell you I am back full time and welcome all of you to come again. There is nothing to lose since there is no charge for the service right now. I look forward to seeing you all there.
Good day,
Poor numbers, lousy politics, huge deficits were all in control of the markets this past week. The market bounced on the realization that the numbers could have been worse. Not much to go on in my opinion. We were able to profit from the markets this week recognizing the markets direction.
The QQQQ 60 min chart has an equal move to the previous high (now support area) which was reached. It was exactly what expected and what was predicted for Friday. The SPY and the DIA reached 200sma support area and started with its consolidation. If the consolidation above the 200sma does continue, the odds for a break down will increase. Let’s look at the daily charts. The QQQQ has some support at the 50sma area, but scrolling in back we can see the 50sma is not a big deal. The SPY and the DIA has room for more of a downside move and the first support is the 10sma. Will that hold, we don’t know right now, but the indices have enough room for a Monday morning continuation. To get a better picture it is always good to see the bigger time frame. When that chart is in a strong trend the 10 and 20sma are always important support/resistance areas. Weekly charts show exactly that. For the SPY and the DIA the 10sma previous low is too strong to be broken on the first try and the QQQQ is back in the middle of the big weekly range. After a strong bounce it is logical to expect a correction. Everything is possible, but right now I don’t expect that we will go back to the lows. The bounce was really strong, however volume was not strong. For a true bottom, it was not strong enough. We caught the top and the start of an initial move down which is very important because continuation can be very tricky in a nervous market. For Monday I expect to see selling continuation. For now pace and volume suggest for that possibility. Despite the strong bounce from low, we are still in downtrend and we must respect that. How far this correction will go, I don’t know and that will be my focus the next few days. Will the market go back to the low and a double bottom or it will form higher low we shall see. If the selling pressure continues the flag option will be canceled. For now I’m with the bears and I will go day by day. All that will be updated in this column.
News still plays a big part of this market. The treasury said they will buy another trillion dollars of toxic assets this weekend and the markets appear to going higher now Monday morning. I will continue to follow that action.
Those of you that used to come into the trading room and stopped, I want to tell you I am back full time and welcome all of you to come again. There is nothing to lose since there is no charge for the service right now. I look forward to seeing you all there.
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