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Market Comments for February 25, 2015

 

Yesterday the market gapped down a small amount and initially ran lower to test the key support area from the prior day as was discussed. This set the low of the day at the 10.00 reversal time as the market rallied sharply to trade above the prior day’s high and set the high of the day at “1” just after 11.15 reversal time. The market pulled back but formed a higher low at “2” which caused a rally that tested the high of the day.

The concept for the past three days now has been similar. The breakout on the daily chart 11 days ago was discussed then has something that would likely lead to a new stage II daily and a strong power trend which is exactly what has happened. Over the last three days however the extension has been enough that if the intraday patterns were to ever break, it should be considered a time for short-term profit taking and for intraday shorting. That has never happened as the intraday pattern has remained flawless and therefore continues to be bullish. The discussion yesterday was to remain bullish at support and at once again support held and proved to be an excellent concept. The same thing continues today as things remain very bullish, and will be until they are not. The difference today is that we do have an actual resistance area at “1”. Above that is once again bullish, but there is a higher likelihood today that “1” will hold and prices will see a return to “2”. If “2” were to not hold after the morning reversal times, and there is a good likelihood prices will see an intraday downtrend began.