Thursday, April 16, 2009

MARKET COMMENTARY (4-15-09)

Today's earnings and economic reports will move the market for sure. I say this because yesterday's last hour spike helped create a Rising 4 Method. There are combinations for this pattern, such as the Rising 3, or 5, or 7 Methods, and they were prevalent enough to keep this rally alive. the Method is created using a long white candle, 2 minor distributional days, and another white candle to sandwich the pattern together.

For the reports, we have Housing Starts, Jobless Claims, and the Philly Fed. This first two come at 8:30AM EST and the latter comes at 10:00AM EST. The consensus for the starts is 0.570M with a range of 0.500 to 0.645M, with a previous reading of 0.583M. The consensus for the claims is 658K vs. the previous reading of 654K. Finally, economists expect the Philly Fed reading to come in at -30.2 with a range of -37.5 to -28.0, with a previous reading of -35. Their charts can be seen below:



As for earnings, we have some notable ones coming out pre-market: BAX, FCS, GCI, HOG, ITW, JPM, KNL, NOK, SHW, SON, LUV, USAK, and UTEK. There are some big names in this bunch that will lead the market today. By looks of the chart alone, it appears that the market will head higher. If we do, it is important to note that the SPX is likely to get stopped at the upper bollinger at 868, provided it passes through some minor resistance levels. The rising wedge on the 6 month chart itself, is not a bullish pattern, but as you can see in the orange box drawn, there is enough support at the bottom of the Method.


I added the chart of the COMP to show the striking distance to the 200-day MA for the Nasdaq. The index will first be met by resistance at the January high of approximately 1660 as well as the upper bollinger at 1677. I received several questions regardling the matter of scaling in shorts. I have not. I decided to add on the first breakdown of any group bullish pattern, such as the Method. So far, that has not occurred. Lastly, you can see the breakdown of the VIX to confirm and support the rally at hand.


1 comment:

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