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Market Comments for August 8, 2014

 

Since the middle of May the market has been in a very strong and tight uptrend on the daily chart. Though occasional red bars have formed, the power of the uptrend has never been questioned. For the first time after the close of the red bar on July 31 the comments were “this one is different” and we already have seen the effect to some extent on the daily chart. This is the first time in almost 3 months that the market is not overcome a red bar and has stumbled greatly. While sitting on a support area, the QQQ had the ball dropped by the Bulls yesterday as a gap up failed and the market left another red bar on the chart with yet another lower high.

It is certainly possible that a rally could ensue. The ability of that rally to make a new high seriously questioned. It is also quite possible we see the market continued to bleed, especially if the support at “2” is broken. The market will always be difficult when a strong uptrend begins to falter. Keep in mind that even if a daily downtrend begins, the weekly chart is still in a perfect uptrend and support will be found around 89.00 to 90.00.