Wednesday, April 22, 2009

Whipsaw Wednesday

Wednesday was a wide ride in the markets with the SPX gaining strong through most of the morning and midday but then crashing down in the last hour to close around 840. Definitely a bearish finish to the day and I would fully expect the market to pull back further into the weekend. We had a shot of rallying higher today but gave it up in the last hour. Technically, we probably have room down to 810 and probably more like 800 as a target to the downside the next few days. The candlestick today formed an ugly reversal and I see a bearish head and shoulders pattern now taking effect on the 60min SPX chart.

For Thursday, I want to be short biased intraday with the expectation of seeing a further pullback. The pivot is at 843.25 and price is trading below that tonight so I would think it could be a tough resistance area to overcome in the morning. If we do however get over that pivot and grind higher then I wouldn't be completely convinced on this market going higher until it broke Wednesday's highs, which are quite a bit higher from here. Trade safe.

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