SPX 827.16 after bouncing off from 823 S. Markets are now oversold at the aforementioned supports, but with irrational momentum driven market, the pivotal supports should be watched as we have many chest-beating bear beasts.
Today's' market events: http://www.cnbc.com/id/29129662
1Best Market analysis update and forecasts as of 2/9/2009 close
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
Market analysis update and forecasts: 2/6/2009 close
The SPX daily EW cycle formation is based on alternative scenario which SPX is forming a completion of a corrective wave D of a corrective wave "A" of Supercycle "V", VLT for my notation, from Oct 2007 rather than a continuation of a corrective wave 4 of wave "C" of Supercycle "V".
SPX 900 +/- is a strong resistance just same as SPX 870 which I noted on my earlier postings.
SPX 800 is a downside pivotal support which I noted and now as traders are closely watching the support areas: SPX 800, DOW 8000, and Nasdaq 1500.
The SPX 60min is broken above the vst downtrend as alerted a breakout from SPX 850. It traded to SPX 870 R. SPX formed a symmetrical formation as shown on the chart, and is in progress forming a diamond formation trading to SPX 900.
Markets are bearish even though we saw price advance during the last couple of trading days; and, the stimulus program is still being refined and redefined subprograms. I think that markets are already starting to discount the stimulus program and further delay of the stimulus program finalization will negatively impact markets. We now have intraday overbought markets, hence, having a good consolidation period rather than severe sell-off is certainly a plus.
SPX daily is showing a breakout from the intermediate term down trend line. The breakout is confirmed by a positive momentum signaled by daily macd. Going into the Friday rally pushed markets to break out from resistances, I alerted positive divergences. SPX has broken above alerted 850, but didn't close above 870 R after trading to 870.75.
SPX shows less strong breakout momentum than Qs and Nasdaq which are showing opening and closing prices are above the ST down trend lines. Since Qs and Nasdaq is leading markets, we can consider market price actions are to upside.
While SPX 60m price actions provide a better signal to a breakout, the daily price action shown below is yet to improve. 60min price action is now getting overbought, however, we had better market trading volumes during the last couple of trading days. SPX closing above 20dma is also positive, yet, as noted earlier, SPX 870 is a strong resistance. Breaking above 870 is, of course, positive that markets will further advance to 900 and to 950. Nevertheless, SPX is approaching a resistance which could change the wave formation to more bearish scenario if it fails to show strength during the next week. Whether we will see "Valentine massacre" is yet to be clued in.
Qs has broken out of the symmetrical formation with a strong advance price formation closing at 31.37 after trading to 31.51 near 1/6/2009 high, forming a series of modified cup & handle formations which I noted on my previous comments.
Based on a successful triangle formation breakout scenario, the price will progress to 34 +/-. This is a vst positive scenario and a negative scenario wave formation is making to upper trend line resistance and regressing to downside breaking the lower support. Qs/Nasdaq is leading markets and during the next week, whether markets will show a continuation of positive price action is in question even though we have seen better price actions for a bounce lately. Clearly, Qs is giving, at least from a hopeful perspective, us a clue to future market direction. Within the larger price formation, a break of a diamond formation is also in progress as Qs is breaking out of the symmetrical triangle formation. However, if the diamond and symmetrical triangle formation is not successfully complete the vst target to 34 by failing to breaking above RST formation which is an extension price action of the diamond formation, then we have alternative EW counts which will be considered later.
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