Wednesday, February 11, 2009


Oh man, we got some problems. I'm not kidding. If we break below 820, or 7 pts below our current level of 827, then that will break the only uptrend support level that the market has been relying on so heavily in the past few weeks. You don't have to be smart to figure this out. I can guarantee that you'll see some serious selling if (when) that happens.

If we do get a bounce, watch the 839 -840 level. This is the location of the 20-day MA. The SPX dropped 30 pts the last time the market failed the 20-day. In addition, 850 is key resistance which also serves as a psychological reversal area where the SPX has failed many times..

This one is really tough for the bulls. In the intermediate-term, the action from mid-January till now looks like a bear continuation flag. It can also be an ascending triangle, but the market has to recover most of yesterday's losses today to even have the slightest chance for an upside breakout. If we get some bs secondary reaction rally, it'll be time to re-short. This environment also sets up for higher probability swing trades, most of which will be entered at the very end of the day.

Focus is on the REITs, large and regional banks. They will give you the biggest bang for your buck.

WSP Once Again:

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

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