Thursday, May 21, 2009

05/21/09 Market Recap

Saw a third straight down day in the SPX, today having the largest amount of negative sentiment as declining issues outnumbered advancers by nearly a 3-to-1 ratio. All sectors were down big today except for financials which ended green, this was because the Federal Deposit Insurance Corporation announced today the approval of GMAC Financial Services to participate in the Temporary Liquidity Guarantee Program.

The SPX bounced off that key 880 level(low of day was 879.61) which is the 23% fibonacci retracement as well as previous support. I'm still net long I won't switch over to the short side until we see a close below 880 on the SPX.

The ES broke down past the 895 level of support and is now outside of the upchannel, the chart has been looking more and more bearish in the past few days and it seems like it is putting in a temporary top. But I won't be convinced until we see a close below 880, while a close above 900 would be bullish. Whichever of these occur will dictate my holdings going into the long weekend.

The Nasdaq is showing similar signs of weakness, for now it appears to have found support in the 1358 area, a close below will add to the bearish scenario.

Long candidate, KWK:

Long candidate, EJ:

Short candidate, PRGO(rising wedge):

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