Markets will sell on the stimulus program news and TS Geithner news at pivotal resistances as we have seen after 1/6/2009? Markets remained in a trading range almost for 3 months. Inability to break above the resistances and selling on the news is very bearish.
Major markets consolidated in a narrow range today and closed with a fractal formation of 1/6/2009 with doji formations. Markets were trading in light volumes, which could be considered as a healthy consolidation day, however, intraday is still showing overbought condition. We have a widely followed Bradley turn date as 2/8/2009, however, based on my cycle analysis, I alerted 1/20/2009 as a CIT and 2/2/2009 as a turn date. Nevertheless, the fact that markets finished with doji and intraday overbought condition leads me to remain cautious until we see further consolidation until intraday is oversold or ready to continue the recent uptrend.
As shown on the Qs 60min chart, Qs traded to 31.67 resistance and closed at 31.50. Supports are 31 and 30.50. The breakout support near at 30 is a pivotal support. We have very low P/C reading as of today’s close, 0.67, which is a warning signal for a market pull back.
GOOG and AAPL rallied 30% since 1/20/2009 bottom performing stronger than most of other stocks. FAS which is 3x (triple leverage) of financial rallied 50% since the recent low 7.64 even though it sold off from $58 to $7.50 in a few months.
We have the first prime time Obama news conference at 8 pm, so, hopefully, we will be a better tone to market actions after a consolidation period instead of severe sell-off which we have seen after 1/6/2009 doji close. As noted on my previous comments, markets are trading at important resistances, so, breaking above is quite positive for inter mediate term. Hopefully, we will see healthy consolidation period and resume moderate market bounce to SPX 900 and to SPX 1000 +/-. SPX 850 is the breakout support. Good luck
http://trend-signals.blogspot.com/2009/02/market-comments.html
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