Wednesday, January 7, 2009
Wednesday we saw just about exactly what I highlighted in the previous nights analysis. After we gapped down in the morning we had no attempt at a gap fill. There were only few retracements throughout the morning that provided from short entries. But if you got in and held till the close you had a great day.
The market slid on Wed. because it was technically set up to DO SO. Of course the headlines will blame the bad news from Alcoa and Intel. Sure that added fuel but the point is that these charts don't lie and showed signs of rolling over on Tuesday. The market is having a nice retracement of the big rally the last week or so.
Oil fell off a cliff just as expected after the inventory data. Gold is rolling over and looks to be having trouble getting over that 50 day ma so I am not interested in gold until it gets back over 900. Commodities led the rally last week and seem to be leading the pullback midweek.
The question is whether this will be more than a pullback. I am looking for the 890 level tomorrow to show some support. I think we may bounce in the that area. However, if we do break, and close, below the 876-880 crucial support then I will become more bearish. As for now we are in a normal pullback mode. The 50% retrace should give us some bounce so we shall see.
Thursday could be one of those sell in the morning days followed by reversal in afternoon type situations. Obama is speaking at 11am et on the economy so it will be interesting to see if he inspires the markets.