Monday, October 6, 2008


The market has an extremely high chance of having hit capitulation, although I do not like how the day formed. I wanted to see an extremely sharp decline, and now a leveled decline that just drifts throughout the day. Nonetheless, buyers did swoop in in the last hour of the day, taking the market to a higher low, which was my signal for long entry.

In the 1-day chart below, the blue circle marks the 5-min bar where the market penetrated it's previous low. The act of penetrating resistance in full-force gave signal to other players to go long. The red lines are additional resistance areas we penetrated, but also serve as tomorrow's support.

S&P 500 (SPX) - 1 day

In a 3-day chart below, we formed a bullish wedge which indeed broke out to the upside. Purple lines mark tomorrow's support, if necessary.

S&P 500 (SPX) - 3 day

In a 5-day chart below, we see the same as above, but we also see longer-term resistance up ahead. This rally may last for 2 days or 2 weeks, who knows, but it's important to make note of all resistance areas ahead of time.

S&P 500 (SPX) - 5 day

Don't forget to try out the Free Trend Analysis. It's FREE, so give it a shot!


Anonymous said...

Hi John,
Do you think the market is way oversold and have a short term bounce from here? Can you give me input about AAPL and POT? Thanks

John C. Lee said...

absolutely, major oversold levels. The day went exactly as I pictured it. I am 100% long and I not only have POT, but 5 other fertz/agri's as long positions which will be closed out depending on the duration of the rally.

Anonymous said...

Thanks John =:)