Pristine Trading
All posts from Pristine Trading
Pristine Trading in,

Market Comments for October 5, 2014


On Friday the market gapped up and continued higher leaving a small green bar on the daily chart. This was a big follow through move to the prior day’s afternoon rally that left a big bottoming tail that had tested the long awaited support area on the daily chart at “2”. The pattern leading down to the support area was a very difficult one and not the type of pullback that the bulls want to stay bullish. However the support area has been awaited on both the daily and weekly charts for some time. The SPY does not have a similar support area. It possibly could need to fall to “3” before its real support is found. That does not mean the market has to go lower, but every day up will be a challenge for the market.

Trendlines can sometimes form a pseudo- resistance area; there is logic to it when the price pattern above is a difficult one. Today may be a pivotal day because trading above “1” will challenge the micro downtrend that is in place on the daily chart. The rally was also significant enough that is possible that a return to the support area at “2” (or anywhere in that long bottoming tail) see could be a successful retest keeping the market sideways or with a second chance to go higher. A cautious trader would want to see more from the market before being too bullish; an aggressive trader would trust the support area at “2”.