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Market Comments for October 16, 2014

 

Yesterday was a big day in the market. There is a saying in the market that prices tend to fall a lot faster than they rally. This is more than just a saying because it is quite true. The drop over the last five days in the market measured to yesterday’s low erased five months of rally between May and September. The decline yesterday brought the QQQ into a critical support area on the weekly chart at “4”. Between the acceleration, the heavy volume, and the support level the market reversed from another huge red bar during lunch and turned green to close strong. Yesterday’s low will be a significant low because it will likely mark the new pivot low of the next leg up in the weekly chart of the QQQ and the SPY. The daily chart will be in for a tough test up in the $96-$97 area which may form a lower high. We’ll have to see how prices attack that area and how they handle it but for now a significant low has been set and it has maintained the weekly uptrend as it is properly gauged.