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Market Comments for March 3, 2015

 

Yesterday the market gapped up and during the first 30 minutes of the day it traded significantly higher to clear the top of the hourly and daily congestion, which can be seen as the prior daily highs on the 15 minute chart above. This set a morning high, which was challenged going into lunch. The market then pulled back setting a lunchtime low at “2” and the subsequent buy setup took the market to new highs. The SPY was the similar but the daily chart is weaker.

For many days the market has been leaving very narrow bars on the daily chart and prices have basically been sideways for the prior five days. We stated that prices will remain sideways until they are not and that a bread above the base at this point could begin a new stage II daily. During the last five days prices held a sideways pattern, the market had gone sideways long enough that a trade above the base was successfully bought and prices continued higher into the close. This means that the daily chart will likely resume a power trend grinding type of stage II that will not have any immediate end in sight. Prices have support at “1”. This is the key area. While “2” will act as support, it will challenge the breakout on the daily chart that has occurred and it will need confirmation of holding before it can be trusted. There is no resistance in sight.