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Market Comments for October 24, 2014

 

Yesterday the market gapped up enough to clear the red bar from the prior day. We discussed yesterday how this would be a bullish event. There is no exact resistance area to the left of “1”, there is just a very thick area of general price resistance. The fact that the red bar formed there made this a focal area. We were concerned yesterday this is not a very big red bar, it would be better if it was larger. It has also been many days up in a row but nevertheless prices were able to clear that red bar. It shows the bulls are not exhausted even after the run has now retraced almost 100% of a very large six day decline. This confirms more bullishness but does not change the fact that a stall in this general area is still very likely but there is more evidence that the stage II uptrend on the daily chart will resume. Note that the QQQ weekly chart is still in a strong uptrend although it has become much more volatile at this prior high which often leads to a retest and failure to go higher.