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Market Comments for October 10, 2014

 

Two days ago prices reinforced the previously questionable support area at “2”. Yesterday the market gave a very weak showing and retraced most of the prior day’s green bar in the QQQ and almost all of it in the SPY. This is not the follow through the bulls wanted to see and as a matter fact it is the only time that a wide range green bar was not followed through bullishly immediately going back even a couple of years. This could prove to be a retest of the support area at “2”, or it could be a failure of the prior day’s wide green bar and continued choppiness as prices continue to seek support levels lower.

Much will be determined today and the positive side for traders is that there is now a definitive line at “1” and closing above that unquestionably means a resumption a stage II uptrends. While this was the likely outcome already after the prior day’s green bar, the red bar from yesterday says caution and wait for confirmation.