Coffee with GannFann

Is that a Hole in our Boat?

Yesterday:

The S&P broke through in important support range of 1180 and then began a retest of the prior lows. Selling started to accelerate as program trading began to intensify.  The S&P dropped over 100 S&P points during the trading session.  When comparing yesterdays trading action in percentage terms to other crash like patterns, they are not similar.  In my commentary I implied that the price action would become fair and orderly.  What I meant in that statement was there would be opportunities for individuals and mutual funds to exit positions, instead of the freefall scenario. I'm not implying that we could not have a crash like scenario developing.  As of now, the market is absorbing, or at least allowing some countermoves to take place.  During crash like patterns, fear is one of the predominant factors in the pattern and the move begins a freefall.

Today:

This selloff has accelerated and could be slightly ahead of itself on short-term so a mini counteraction could occur.  This buying or short covering will quickly be absorbed and the market should again decline. We are just beginning to see the point where fear is starting to come into the marketplace.  I believe it took selloff of this type to finally shake the individual investor into realizing that the market is in a dangerous position.  Individuals are finally concerned of their financial positions and that a fallout could occur.  Fear is not predominant in this marketplace but complacency is slowly creeping out.  Finally, we have investors concerned over the possible outcome of bank failures.  The market was littered with the corpses of many banks and businesses that have failed, but these failures had yet to create fear in the individual investor.

 It is my contention we have further to go, but there is some support or retracement ranges that I feel could come into play.  These will function only as counter rallies that very likely will be sold into by hedge funds and mutual funds.  What should concern the individual investor or a trader would be the fact that many hedge funds or mutual funds will need to minimize their exposure and risk in this market environment.  If prices break pass the important 1070 range bring prices to the low 990- 1000 area.  If we fail to get a rally or bounce off the support of 1070 prices will head into the 990-1000 where we should find support.

Support / Resistance:

 1150-1152  2nd resistance
1128-1130  1st resistance
1070-1072 1st support
988-990   2nd support

Notes:

Look for a retracement or counter move that could trade into the 1150 range and should find resistance there. Keep in mind that this rally or counter move could dry up quickly as traders and fund managers look for the door.

Gannfann

Keeping Bailing!!!.... We are still taking in Water!!

Yesterday:

On Friday the S&P was still waiting for signs of the financial bailout, so there was some sideways trading action. The market did hold the important trading range of 1180 and rallied off the lows.

Today:

The market should continue to sell off but the market must break the 1180 range to confirm the retest. In my mind there is nothing that will prevent the breakdown in this market, but at least we might see a fare and orderly decline. The breakdown of RIMM on Friday is an example of the weakness of the overall market and how even the darlings of wall street eventually sell off or break down. This market has much further to go on the downside and we are seeing further signs of mutual fund distribution. This has been happening in stocks such as RIMM, APPL and GOOG for some time and shows the deterioration of the market favorites. To me the strategy is clear that shorting the rallies and paying attention to the fact that counter rallies or short coverings take place in this environment.

Support / Resistance:

1223-1225 2nd resistance
1207-1209 1st resistance
1193-1195 1st support
1175-1177 2nd support

Notes:

Keep in mind that although the overall pattern is bearish prices are above some important retracements. There has not been such a great rally off of those support ranges so that could indicate further weakness.

Gannfann

 

 

Mr. McCain Goes to Washington!!

Yesterday:

The S&P made a bounce off the 1180 lows and it held that important price range. This is an important range and on the short term it appears it was holding that range. 

Today:

The S&P is attempting to create a basing pattern on the short term and may attempt a rally that will break. This market should continue the slide to the downside but I would use the 1178-1180 range as the indicator for a retest of the prior lows. This bill very likely will be pushed through but this would still only bring a fair and orderly decline. It is my feeling that the market will go into the 900 range long term. Of course there is some important support ranges along the way, but I have already outlined them in my commentaries and the video’s. It is still my contention that money mangers will be looking for the doors in any rallies. So there will be continued selling pressure regardless of the outcome.

Support / Resistance:

1210-1212 2nd resistance
1198-1200 1st resistance
1178-1180 1st support
1152-1154 2nd support

Notes:

Keep an eye on the 1180 range since a break of that range would signal a test of the old lows. I think if prices break the 1175-80 range prices such go much lower, and could reach the 1080 area.

BTW….. There will be no commentary for tomorrow, I will be out of town on business.
I want to thank all of you for your great questions and your devotion to this site.
 
Gannfann

Yard Sale!! No Reasonable Offer Refused

Yesterday:

The market continued to sell off into the 1187 range after it broke the 1200 level. Oil sold off from the 120 range since it was resistance. There was continued weakness during the day as managers start to look for the door.

Today:

The S&P should continue the decline as the government officials point the fingers at each other. It almost seems as if Congress thinks Paulson and Bernake need the money to pay their bookies. So much of this crisis was created a long time ago and no one was complaining when people were making money, but there is always a price that must be paid. There is very little that can be done here but infuse money into the system and minimize the damage by implementing these changes quickly. The hesitations of those at the helm (trying to grab the wheel and guide the ship now after being in a long coma) will create a ripple effect in the global markets that will be unrecoverable. This market has the potential for a major meltdown if they do not step in soon. There is nothing in my mind that I feel will prevent the major decline from happening, it is just a question of if it will be fair and orderly. The price of 700 billion will seem like a bargain if the US and Global markets crash taking trillions, ushering in a depression like scenario.

We should see a continued break to the downside and my call for a change in trend was incorrect. I did feel the possibility existed that the high would be the day before since the change in trend date must create a 5th wave high or double top. That was the reason for the title of 2 day rally? If you have been following my calls for a change in trend and you are looking for a short many times your best entry is the day before. This is because the trend change date can sell off right from the open and because a failed 5th wave. This is what happened on the 9/19 when my price target was hit first. If you look at the intraday the move completed the short term wave count and 9/22 became the 3 wave down move on the short term. Anyway I should have adjusted my analysis (time) after my price target was hit (I called a 1267 target… 1265.12 was the actual). Look for a break to retest the prior lows if we break the 1180 range.

Support / Resistance:

1210-1212 2nd resistance
1198-1200 1st resistance
1170-1172 1st support
1160-1162 2nd support

Notes:

Watch a potential for a short term clean up at the 1180 range. This could be because the short term Elliott wave count could have completed yesterday. I base this on the move from 1213 (wave 4 up move) and the sell off into the close to 1188 (wave 5).

Gannfann

Is this the Rest Stop?

Yesterday:

The S&P broke down right from the open and sold off hard and never looked back.  In my commentary, I stated that we would see it changing trend occur on the 23rd. I had expected another attempt at the high, but right from the open it was clear the move would fail and we would sell off. The trading day was expected since sellers are looking for the door and took advantage of an up market. Oil hit my target price of 120 yesterday in one of the biggest moves in oil market has seen. Here are my comments on September 18th.......

"This commodity rally should continue for some time as oil should hit the 119-120 level, but must break 101. "

Today:

The market sold off yesterday pretty dramatically and slightly ahead of itself.  Look out today for important support ranges as such as the 1200 area.  There could be a bounce if we are to get one at the 1200 range, and a break under that range will signal the retest.. It is my contention that there is nothing that will prevent the retest prior lows and this market will break down further.  There will be a steady decline, but we should a slight counter rally to absorb some selling pressure that has occurred since yesterday.

Support / Resistance:

1238-1240 2nd resistance
1218-1220 1st resistance
1198-1200 1st support
1178-1180 2nd support

 
Notes:

Watch out for the market to attempt a bounce at the important support ranges. The markets should continue to sell off and retest the prior lows.

Gannfann

Two Day Rally?

Yesterday:

The S&P on Friday rallied hard right off the open from the prior close at 1206 to the high of 1265.12 (1.88 off from my forecasted target of 1267!).  Oil continued to rally from the lows of 90 to 101.  Just as forecasted and the entire commodity sector turned around.  Here are my comments……

“Since the SEC has implemented short selling restrictions and other liquidity interventions this market will rally hard very likely into the 1267 range as I pointed out in my video.”

“This rally should extend into next week and I am seeing a change of trend on Sept 23rd.”

Today:

In my commentary on Friday, I suggested that the rally would continue into next week, and I saw a change of trend occurring on September 23rd.  I'm expecting another attempt to rally through 1260-1265 range and the move to weaken and fail.  Since I feel there be a change of trend tomorrow I will be looking for some weakness as prices try to extend to new highs.  Traders should watch prices near the 1260 range since it played such a key role in the past and is on the 50 day moving average.  Look for prices to break soon, and weakness to set in the market shortly as many investment houses and traders looked to take profits or liquidate unfavorable positions. 

Support / Resistance:

1275-1277 2nd resistance
1265-1267 1st resistance
1242-1244 1st support
1220-1222 2nd resistance

Notes:

Keep in mind that there should be an attempted rally that will fail and sellers look to liquidate positions.

Gannfann

New Stock Market Harmony Forecasting Series....Coming Soon!!

Here is a link that will show some of what will be included in the Stock Market Harmony Forecasting Series!! There has been countless hours invested in these discoveries....It has been my life's work and obsession.

Every arrow in every chart has been proven out and shows perfect harmony at work. I can tell you from many years of charting that these concepts are new and will change the way you trade and look at the markets!! The series will teach the viewer from basic charting to advanced charting.... Then the forecasting series.

It is my belief that after going through this series it will leave little doubt that the markets move in perfect harmony!!

Patrick Hughes
Gannfann

 

http://www.screencast.com/t/s5kweWWv

 

New Video AIG II

Here is a new video of AIG since prices attempted a recovery and I wanted to continue the lesson..

Enjoy

http://www.screencast.com/t/psY9OFyy7g

Take Those Shorts Off!!!!

Yesterday:

The market rallied hard off the lows of the day as new short selling restrictions were created.  For those of you that purchase my forecasting series I will show you how this move worked in perfect harmony and it will make perfect sense. After watching the video the viewer should have no doubt that the market works in perfection and you will discover that these moves have very little to do with news. In the video you will see how you could have forecasted this move within a couple of cents. This kind of move should have been expected since prices were oversold and had sold off for some time. It was this kind of move that I was warning traders about in my commentary.

“The S&P will attempt a short term recovery or retracement from the past several days of declines. This recovery and short term rally will fail and the down trend will continue.”

“I think we trade much lower but it makes sense to see short covering and retracements along the way.”

Today:

Since the SEC has implemented short selling restrictions and other liquidity interventions this market will rally hard very likely into the 1267 range as I pointed out in my video. Technical Analyst must understand that many times retracement work but they can be violated (there is a reason that will make perfect sense). This rally should extend into next week and I am seeing a change of trend on Sept 23rd.

Support / Resistance:

1267-1269 3rd resistance
1242-1244 2nd resistance
1223-1225 1st resistance
1210-1212 1st support

Notes:

In my commentary I have pointed out that there is little that will prevent the long decline but the government is doing a good job at creating an orderly decline. Expect a continued rally since anyone that did not cover yesterday will cover today. This rally will not be a big deal for those that hedged themselves correctly. 

Gannfann

Fear & Greed!!!

Yesterday:

The S&P continued the slide and violated the 1170 range the 50% retracement level to a low of 1155.88 showing weakness. Prices sold hard right into the close as concerns of stability and exposure made many mangers to sell or minimize their positions. Fears of further bank failures or the damage in the financials in our markets and globally created further selling pressure. Commodities rallied hard as managers or investors ran into gold for protectionism and safety. Looking at Oil it held the 90-91 range as I pointed out 2 days ago, and natural gas and other commodities rallied. This commodity rally should continue for some time as oil should hit the 119-120 level, but must break 101. These are my comments from September 16th…….

"It is my contention that the commodity corrective move has come close to resolving itself. Oil prices should hold the 90-91 range, since this is major support.  It is my feeling that commodities will begin a rally soon as prices have come into major support level and many sectors."

Today:

The S&P will attempt a short term recovery or retracement from the past several days of declines. This recovery and short term rally will fail and the down trend will continue. I think prices will reach the 1075-1077 range. There is little I feel that can prevent this from occurring. Traders must watch the 1170 range for the potential for a basing period but I think this will be short lived. I think we trade much lower but it makes sense to see short covering and retracements along the way.

Support / Resistance:

1180-1182 2nd resistance
1170-1172 1st resistance
1138-1140 1st support
1122-1224 2nd support

Notes:

Watch counter rallies but weaken as selling pressures and fears start to come in.

Gannfann