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Market Comments for February 3, 2015

 

Yesterday the market opened flat and traded sharply lower during the first half hour of the day, following through on the Friday afternoon selloff. It set the low of the day at the 10.00 reversal time and rallied sharply to retest the high of the day. From there it pulled back about half way to low and then consolidated sideways for the rest of the day leaving a large bottoming tail bar on the daily chart that retested the low from Thursday. The SPY was similar.

Before the market closed yesterday the focal areas were at “1” for support, and the area marked “1.5”for resistance. A late day rally broke across 1.5. This means the area at “1” is actually critical to the Bulls. Trading under that past 10.30 would mean a continuation of the intraday stage IV. While there is heavy resistance at “2”, the momentum gained from the prior close will likely make prices able to deal with the area at “2”. This may take a day, so if we prices do not take out the area at “2” right away, it is possible an all day consolidation may form.