Market Analysis

Major market intradays are showing positive divergences and we have seen a sharp intraday reversal going into close. As we can see on 60min charts, the market momentum is about to turn positive. This market condition is exactly what I referred to on 2/9/2009 market comments that we need to see an intraday market correction, and ideally, markets are oversold and ready for a continued trend up. However, the sell-off which we have seen on 2/10/2009 after the Geithner speech was unexpectedly sharp taking the markets all the way down to the pivotal supports. Ideally, markets have performed as expected in whole even though we have seen wild swings to work off intraday overbought market condition. And now, markets have bounced up from key supports and as commented earlier posts which shown below, while SPX closed above SPX 800, DOW has not closed above 8000. However, DOW has only 30 components, so, we still have hope for markets resuming the recent vst trending up.

SPX 60min EW chart is updated with the break of lower TL support today; however, the EW formation is still intact as an alternative count. If I think that the wave formation is probable, I would not choose it; hence, I think that we have a good probability that we could see SPX 900. Market forecast based on EW are not trading signals as the formation has alternatives.

Daily indicators are now down because of the sharp sell-off on 2/10/2009; however, weekly indicators are positive; therefore, if we see a continued up momentum making new high off of intraday charts which are now oversold and bouncing up, we could see a completion of SPX trading to 900. Of course, the long term bearish wave 5 of supercycle A-B-C correction from March 2000 to Oct 2007 is a typical wave forecast; however, remember that EW waves are not a precise market trading signals. Having said that, since markets have consolidated for almost three month, we could see a move to expand the trading range; and, I am still anticipating to trade up, not to downside, of course, until proven otherwise which is not difficult. If SPX breaks below 800 and if DOW does not recover 8000 during the next couple of days, markets will revisit the Nov2008 lows. The scenario is bearish, and we could see markets continue to lower. However, I don't think that markets will be further demolished. Nevertheless, we are entering to a shortened OE week, and the week could be tricky as usual. I hope that we will see healthy economic stimulus plans as I think that nationalization of banking industry could be a good strategy. Good luck

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After open, markets went into doom and gloom and just when it seems that markets are falling into deep holes, the dark cloud is pushed away, and markets bounced from the supports finishing the day moderately neutral to positive -- a sigh of relief for now.

When the dark doom cloud is going to be away and to stay away is the big question, but I see a ray of hope as markets closed above SPX 800 and Nasdaq 1500, but sadly DOW closing at 7932 refusing to show a sign of hope closing below intensely watched DOW 8000 support -- technically, DOW is a rotten child among SPX, DOW, and Nasdaq. DOW is performing worse than SPX at the moment.

We have intraday ranges around 3%.

$COMPX 1541.71 11.21 0.73% 3.06%
$INDU 7932.76 -6.77 -0.09% 3.09%
$INX 835.19 1.45 0.17% 3.28%