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Market Comments for January 20, 2015

 

Friday the market opened flat and rallied quickly after the open to test the high of the intraday base from the prior day’s afternoon trading. The market then fell to test the low of the day, which set the low for the rest of the day as the market began a five minute uptrend that continued all the way into close. This left a solid green bar on the daily chart and the SPY was the same.

The support area at “4” on the daily chart was reacted to Friday and the market had a good move off of that area. This area has to prove itself because it has been questioned as support and the duration of this rally will be in question until prices see continued strength by the Bulls. In this pattern, it is very possible that today could reverse the green bar from Friday and it is only when we see some good follow through by the Bulls in the afternoon that it will begin to look like this bottom on the daily chart of the QQQ and the SPY will hold. Intraday resistance will be at a level just above where the market closed Friday at “2”. If prices close above “3” it would be a good indication of a new stage II daily chart.