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Market Comments for October 3, 2014

 

We discussed yesterday the fact that even though market landed right on long-awaited daily support area at “2” on Wednesday that the odds were that it would not hold. Yesterday morning the market continued selling off and penetrated deep into the support area. However he did come back completely, forming a bottoming tail and the market closed where it opened, approximately at Wednesday’s low. This bottoming tail is in a key area and may hold, but as discussed, when you look above on the daily chart it is a very difficult pattern to deal with and the SPY looks destined to test the area at “3”. Although a bottoming tail formed on the daily chart, the hourly chart maintained a downtrend that will be tested today. Being the Friday of a fairly volatile week we may see a narrow day today and then the decision will be left for Monday.