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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 691.72

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Jan 16 4:00 PM EST

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To: Johnny Canuck who wrote (47688)	4/9/2012 11:05:04 PM
From: Johnny Canuck	Read Replies (1) of 69852

Gap open on all the indices to the downside. There seems to be shift in psychology. There is talk of a slow down later in the year and growth is being revised from 8 percent from last quarter to 1 percent going forward. China's slowing is slowly being priced into the market. SP500 had a gap open and did not rally even enough to fill the gap intra-day indicating an extremely negative sentiment. Though the market was open most large institution investors will still be on vacation from the long weekend. Trading was slight below average, but heavy for a holiday trading day. Tomorrow's reaction will be more telliing than todays trading. Technically the DOW broke the short term consolidation pattern and bounced off support at the support level below. A break of that support level would confirm a sell signal on theSP500. Right now a sell signal has not been triggered yet. Same comment on the DOW. This level is a reasonably strong support level. It will take time to break without significant market moving news. DOW transportation index now on a sell. If we get a confirmation day tomorrow, it would indicate that one should go flat the DOW despite the fact it has not generated a sell signal yet. The DOW can not make a sustained new high without a new high in the DOW transportation index. COMPQ showing an orderly pull back to the next support level down. It is still in a uptrend and a orderly pull back would be expected if the index is going to move higher. Day 4 of the current sell on in the financials. It filled the gap today so I would expect a bounce in the next day or so. Next support level is around $14.80 for this index surrogate. Gold still in a downward sloping channel. Oil now on a sell signal. It is currently sitting right on top of a strong support level. I expect a counter rally that will fail in the next day or so. The shoulder season will have to be over before we see the energy sector counter rally. Weakening economic demand and an over supply in North America will keep the sector on the defensive till the summer cooling season kicks in.

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