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Market Comments for January 23, 2015

 

Yesterday the market gapped up and immediately sold off in response to a gap. It sold off until the 10.00 reversal time when it encountered support from the prior day. This led to a very strong rally that went to a significant new high topping out around 11.15. It consolidated sideways in a very tight range throughout lunch and broke out at the 2.15 reversal time for another strong rally to close the day with one of the biggest green bars on the daily chart. The SPY was the same.

Yesterday’s discussion was about the fact that we read a very key area and the market will likely have a significant move and we had to let the market tell us because there are too many variables at work. The market has clearly chosen the bullish route and the daily chart has proven a lot. It has run into the prior highs at “2”. There is a wide range of resistance from “2” to “3”and that whole range will serve as the resistance area that will likely make prices stall. They could even stall here as technically speaking we can’t say prices have really broken the area at “2” yet. Look for a narrow day or the next couple of days and if those days are green will likely see some red in the pattern beginning next week. That will likely set up a consolidation or a mild pullback that will then see the daily chart resume its stage II uptrend.