Market Analysis and forecasts

SPY is showing a breakout and failed formation showing more bearish as it is traded below the lower trendline support in the formation. The future market actions are also showing the follow through bearish price actions as futures are trading near the recent low support of 2/12/2009. Multitude of crowds of Main and Wall Street will be very disappointed and actually would be devastated if markets will continue to trade down as I noted that many are hoping for economic bounce during the second half of 2009 – meaning financial markets will trade to upside, not to downside as market functions with discounting mechanism.

As for market actions during the OE week, market sentiment is very bearish and hence not many have courage to buy the markets. During the recent market actions since Nov 2008 bottom, mostly small and hedge fund activities, not institutional and other big investors as many see that financial market fundamentals are not ready for a good market bottom which the big money can park on for a good period. Therefore, mostly, markets are operated by traders for short term trading. Having said that, many are holding short or accumulating shorts based on reading market sentiment reports; so, unless markets show improved price actions, the extreme bear sentiment is continuing which could take markets further down breaking the Nov 2008 low, unfortunately for our economy as we will be heading to severe depression in that case. Many are chatting on financial boards that the Fed and the Gov is only pushing markets to upside; however, saying so is either naïve or unintelligible about the reality of the financial markets – not only in the United States, but also globally and the both entity is controlled by the big money masters who are profiting both from bull and bear markets – and the masters are voracious bears lately.

Pivotal Supports: SPX 800 +/-, Qs 30 +/-, Nasdaq 1500 +/-, DOW 7500 +/-
VST (very short term: intraday-a few days) : trading near at pivotal support
ST (Short term: a few days – 3 mos) : bearish
IT (intermediate term: 3 mos – 1 yr) : neutral




Qs 60min is showing weak price advancement after bouncing off from the lower TL support in a lower price channel formation. The recent double top formation is clearly bearish showing a distribution formation trapping anyone who thought that markets will bounce more than it has. The price momentum shown on macd positive is very weak which is also confirming bearish market actions.




Recent market price actions breaking above the ST down TL were evidently a false breakout as we can see on the major market price formations are marring the defined triangle formations. False breakout is not a surprise as it does happen whether we are in bear or bull market.