Coffee with GannFann

Stimulus or Redistribution?

Yesterday:

 

Prices could not hold over the 50dma and traded under the average all day. Prices went through a corrective move or retracement but could not hold the 850. I had mentioned in my commentary that prices tend to retest the 50dma after breaking through the 50dma. I had stressed in the comments that there was important resistance at the 871-874 range and at the 50dma. Here are my comments….

 

“Look for the move to create a slight retracement to gain momentum for the rally. Prices should hold the important support ranges at 856 and attempt another move higher.”

 

“Traders need to watch the price action near the important ranges to see if there is commitment to the upside and if the retracement and the 50dma will hold this action.”  Prices could not exceed the 871 range…..Prices could not hold the 850 range….showing weakness…

 

 

Today:

 

Since prices went through a corrective move yesterday prices need to hold the 838-840 range if the bulls are to see this move continue without a retest on the major lows. If prices break those ranges then we should see a test of the 825-827 ranges and could move to the prior lows. We could see the primary trend start to resume and gain downside momentum, since prices bounced off the 50dma.

 

Bulls: Prices need to hold the support retracement ranges of the 838-840 area and needs to gain some strength here. There were some negatives that occurred yesterday for the bulls and they are the following….. Prices could not close above the 50dma..Prices could not break the prior high… Prices could not hold the important retracement range near 850 and sold off into the close….    So… the bulls need prices to gain some momentum and hold the 838-840 or prices could break into the prior lows of 800 price range.

 

Bears: The bears should have there day here since prices failed to hold the significant ranges and could not close above the 50dma. So far the action is starting to favor the bears since prices have retraced and appeared weak off the retracement ranges. Prices are under the 50dma and an important retracement so that has provided resistance. The bears could see prices start to break and the primary trend start again if prices do not gain some upside momentum here.

 

Support / Resistance:

 

875-877 2^nd resistance

861-863 1^st resistance

838-840 1^st support

826-828 2^nd support

 

Notes:

 

Look out for the primary trend to start to the downside soon if prices fail to hold these retracement ranges. The odds favor the bears and it is my belief that we could see lower prices soon. If we are in a bull move, prices must gain strength here and momentum.

 

Gannfann

Ouchhh!! Just fell off the Fence!!

Yesterday:

 

The S&P on the open broke through the important 850 range and went through my first target. This indicated some strength in the move and a retest of the 50dma at 871. In my commentary I pointed out the prices should move to the 871 but should find resistance there. Prices closed above the 50dma which is a bullish sign but there needs to be confirmation of several days to confirm, because many times prices can move back under the average. So I was wrong on time and price yesterday as far as the turn but the time frame turned out to be a low.

 

Today:

 

Look for the move to create a slight retracement to gain momentum for the rally. Prices should hold the important support ranges at 856 and attempt another move higher. The 50dma and the retracement at the 871-874 range. This will be an important range on this move and if prices can hold here with the breakout confirmed then prices could reach the 900 range.

 

Bulls: Prices has moved favorably for the bulls as prices broke through important ranges and tested the 50dma. Prices closed above the 50dma but the bulls are not out of the woods just yet, because the break of the 50dma needs to be confirmed. I have stated before that I would not turn bullish unless the prices broke above the 850 range and we have seen that. Of course prices can go through a corrective move and need to hold the 850 range. A second close above the 50dma would also be a positive thing for the rally because the range has an important retracement at the 874 range too.

 

Bears: Prices have reacted well for the bulls in yesterdays trading as prices moved through important ranges. The bears need prices to hold under the 871-874 range and break below the 850 range again. Prices could go through a corrective move but could continue higher so this movement is vital for both the bulls and the bears to validate or confirm if this move has the momentum it needs to continue. I am still bearish on the long term because we are certainly not done with the decline but we are still have attempts at rallies. The bears still have some hope here if prices can hold below the 50dma.

 

Support / Resistance:

 

886-888 2^nd resistance

871-873 1^st resistance

861-863 1^st support

854-856 2^nd support

 

Notes:

 

Traders need to watch the price action near the important ranges to see if there is commitment to the upside and if the retracement and the 50dma will hold this action.

 

Gannfann

What side of the Fence are You on?

Yesterday:

 

In yesterday's commentary suggested that prices were getting close to a break of its pattern.  Prices were unable to break down and traded to the important 850 range near the close, indicating some strength.  The Bulls saw prices maintain important support ranges and did not break the important 800 or 820 range.  Looking at a 5 minute chart, we have been getting higher bottoms since January 23^rd. Prices have held above the 50 day moving average on the 60 minute chart.  Prices closed near 845, which is only 5 points from our important number.  In my previous commentaries I have pointed out that when prices is move past the 50 day moving average they tend to retest that 50 day moving average.  A prudent trader would not hold short position overnight so close to a key support resistance range, unless they good reason to do so. 

 

Today:

 

Prices appeared to have in the premarket broken the 850 range showing a bullish bias to the markets.  I have tried to emphasize the importance of 850 is an important range and a break of that, should indicate a further advance of the counter rally.  I do see a possible turn at 10:10am and that could occur near the price ranges of 858 or 861.  If we are to get a correction or retracement it should occur near that time and price.  Prices should go through a corrective move to retest the 850 breakout range and should hold that price range.  A failure to hold the 845 or 850 range would signal weakness in the overall breakout and indicate weakness in the counter rally.  As prices attempt or retracement traders must be mindful that prices should gain strength, because the 850 resistance has now become support.  The 50 day moving average on the daily is at approximately 868,  so this should provide resistance on the rally.  I do feel that the 50 day moving average, should hold this rally at the price range 868 to 871.

 

Bulls: Prices are continuing to rally and since they broke the important 850 range.  They need to hold that on any retracement corrective move.  A break of the 50 day moving average on the daily would be a positive thing and that is that the 868 range.  Traders on the bullish side, must be mindful that this move could lose momentum rather quickly near those price ranges that I have outlined.  I do see an exhaustion of this move on the short-term and believe a great deal of the movement could have been factored in, already.  Of course a break of the 850 range could indicate further weakness in a possible failure of the breakout.

 

Bears: This is a difficult pattern to trade nd it really depends on if the trader has an existing position or not.  The Bears could see prices exhaust themselves near the 858 or 861 range and approximately 10:10am. The Bears need prices to weaken and break the 850 range.  Since this will indicate a weakness in the rally.  Prices are attempting to return to the 50 day moving average at 868 and the 871 range.  A break of these ranges would be bad for the Bears possibly indicate higher prices.  So if we are to see a high could occur at that time frame or at the prices of 858 or 861.  Traders be mindful of any strength at the 845 and 850 range.

 

Support / Resistance:

868-871 2^nd resistance

858-861 1^st resistance

850-852 1^st support

838-840 2^nd support

 

Notes:

 

Since prices have finally broken out over resistance range traders on both sides must be mindful of the strength or commitment of this move.  Keep in mind that big opening could be sold into and top out creating or retracement to the prior breakout of 845 or 850.  Depending on your style of trading or your market viewpoint, will dictate how this pattern should be traded.

 

Gannfann

On the Green...!!

 Yesterday:

Prices rallied into the important resistance hitting both my price target of 852 (852.53 actual off by .53!!) and my time target of 10:35am (10:30am off by 5mins.). Prices sold off moving to the low of 827.69 at 2:20pm and at 2:06pm I posted “Look out for a short term reversal at 2:15 or 2:25.......” so I was off by 5mins on both swings!! I must admit I was pretty happy with that call, especially since it was both in time and price… :) I posted a chart below….. I will teach this in my series and should prove the point that it is not news that moves the markets!!

Today:

Prices should attempt a follow through from yesterday’s reversal and could attempt a break of the 850 range. Prices have been getting tighter and we should see a break of the range soon that will give us clues to the trend. I am still bearish but a significant break above the 850 range would indicate prices should continue higher for a time. Prices are still under the 50dma and prices have held the 800 range so that must be broken.

 

Bulls: The bulls need to see prices gain some momentum and break the important 850 ranges. It would be very bullish if prices moved above the 50dma at around 870, but traders need to watch there because it provides resistance as well as support. We have seen higher bottoms and prices have held the important 800 range. If prices go through a corrective move today, it needs to hold the 820 range or this move will fail and we should retest the lows.

 

Bears: The bears need prices to hold the 852 range and weaken here as prices attempt to retest the high, look for prices to top early. Prices are moving closer to the apex and we should see a break of the trading range soon. This will give confirmation if the counter move should continue or will fail. This counter move is the last gasp for this move and prices need to break under the 800 range. If prices weaken with a corrective move the bears need prices to break the 820 range where there could be a bounce.

 

Support / Resistance:

861-863 2^nd resistance

850-852 1st resistance

823-825 1^st support

812-814 2^nd support

 

Notes:

Traders need to watch the important S/R ranges since we have been in a pattern and prices are bouncing within the range. Look for a potential failure of a rally and a possible bounce off the 820 range. I am still bearish on this market and need confirmation with a good break to the upside to prove I am wrong. I still feel that prices will break soon when the primary trend resumes.

 

 

Gannfann

Get me my Wedge!! I missed the Green!!

Friday:

 

The S&P held the trading range of 800 on the low and 840 on the high. Prices have been trading in a wedge pattern creating shorter tops but holding the 800 range. The 800 range was tested three times and has held so far, but a break there would be important.

 

Today:

 

I had called for a change for today so we shall see how that plays out. I did state that it could be the low but we need confirmation. I see a change of trend that could occur today between 10:35-10:40am, so watch that timeframe for a turn. Prices need to break the trend line on the 60min from Jan. 16^th that is currently at the 835-840 range. This would be very postive for the bulls but I still feel that this is a continutation pattern and we should see the primary trend resume again.

 

Bulls: The bulls could see prices rally today but they still need prices to break the trend line at 835 and the 850 range. Prices need to gain strength here and prove that it can sustain the counter rally. Since prices tested the 800 range several times the bulls need prices to hold there. The pattern is getting closer to the apex so we should see a good move soon.

 

Bears: The bears need prices to hold the 835-850 range since this has some significance because of prior highs and the trend line. The bears need prices to weaken and break the prior support lows of 800 if they have any chance to see the 770 ranges again. I do feel we should see this range come into play and still feel that the down move or primary trend will be a quick move with some momentum. Prices are still below the 50dma on the daily and the 60min. so that is positive for the bears.

 

Support / Resistance:

 

850-852 2^nd resistance

840-842 1^st resistance

810-812 1^st support

796-798 2^nd support

 

Notes: Traders must watch out a change in trend today and that it could occur today and could be around the 10:35-10:40 time frame. Since prices are in a wedge type pattern traders need to look for the break for the main trend. Of course I am still bearish on this pattern and that the primary trend will resume soon, but this does not mean that this counter move is complete yet. As chartist we always have to wait for confirmation, and let the price action tell you.

 

Gannfann

Where's My Coffee Mug?

Yesterday:

 

The S&P was overbought and went through a short term sell off. Prices rallied mid day back toward the open but could not exceed the open. The S&P was unable the break the 850 range or the open showing weakness.  Here are my comments….

 

“Prices have had a pretty good advance but could but overbought on the short term and may be overextended. Prices should find some resistance at the 850 range and using some measuring techniques (that aren’t infallible) we could have hit the target range from the double bottom.”

 

Today:

Prices should continue the sell off reaching the prior lows and we should start to see a move develop soon. Prices should hold the present trading range and if we do break the 800 lows this should bring prices back to the major prior lows.

 

Bulls: Prices need to strengthen and break the 850 range, but so far every rally has failed every test so far. Weakness has been ruling the day and with much of the bad news still coming out this could wear on the bulls. I do see a change of trend on Jan. 26^th and if that is to occur this may be a short term low. This may give the bulls the change they need but it will be short lived anyway.

 

Bears: So far the price action has favored the bears and has looked weak. Counter rallies that have occurred but correct stop loss placement could have minimized the fallout. The bears do need to be careful here as prices move closer to important lows that have major support, so having a realistic target goal is paramount. A break of the 800 range would be significant for the bears but they must watch out for a possible double bottom of the main prior low.

 

Support / Resistance:

850-852 2^nd resistance

838-840 1^st resistance

811-813 1^st support

798-800 2^nd support

 

Notes:

 

I am seeing a change in trend that could occur on Jan. 26^th so we will see how that plays out. Traders need to watch the prior S/R ranges here and prices could hold the present trading range.

Gannfann

Double Bottom.....At the Bottom?

Yesterday:

 

Prices sold off and hit the 804.30 which was .17 cents from the Jan 20^th low of 804.47, so prices bounced off the prior lows and created a double bottom formation. Prices rallied pretty hard off the lows moving into the 840 range. Here are my comments…..

 

“Watch out for the short term low that has been created at 804, since this will be a short term low. Prices should continue lower but the 800 range will play some important support.”

 

“A break of the 800 range should bring prices back to the old 740 or 770 lows and of course traders should watch for the potential double bottom.”

 

Today:

 

Prices have had a pretty good advance but could but overbought on the short term and may be overextended. Prices should find some resistance at the 850 range and using some measuring techniques (that aren’t infallible) we could have hit the target range from the double bottom. I am a little frustrated because I could have called yesterday turn days in advance, but that’s what happens when you are wearing several different hats!!

 

Bulls: If prices go through a corrective it must find strength soon and hold the 820 range. The bulls need prices to move above the 50dma and rally with some strength and hopefully move over the 850 range.

 

Bears: The bears have been in control for some time and seem to be seeing the counter move retracement from the prior move. Prices need to start to weaken on this move and break under the 820 range again. The bears may need to wait this move out for a short time but the primary trend should begin again soon. The bears must understand that they are in the lower range of support and it is very normal to see prices bounce off these ranges. The movements or rallies off these lows become less in magnitude as prices move closer to breaking the prior lows. The bears need to see prices start to weaken soon and break the 800 range.

                       

Support / Resistance:

 

864-866 2^nd resistance

850-853 1^st resistance

829-831 1^st support

818-820 2^nd support

 

Notes:

 

Prices are testing the prior lows and so far the price movement has been making sense based on where we are in the pattern. I still feel that we will start to see prices accelerate to the lower range but prices need to gain the strength for the break.

 

Gannfann

 

Bear Bones!!

Yesterday:

 

The S&P held the open of 850 (849.64 actual) creating a great short opportunity. Since the 850 range was support on the prior move it becomes resistance when prices trade lower. Prices broke going through a corrective move reaching a low of 804.47 giving a profitable trade. Here are my comments….

 

“Prices should have a corrective move or a retest of the support ranges and of course the 850-852 range is still important.”

 

“We are starting to see the signs of the primary trend resuming.”

 

Today:

 

Watch out for the short term low that has been created at 804, since this will be a short term low. Prices should continue lower but the 800 range will play some important support. I still believe that the primary trend has resumed and will start to accelerate to the downside. We are seeing the banks having additional problems and this will only increase. A break of the 800 range should bring prices back to the old 740 or 770 lows and of course traders should watch for the potential double bottom. I do believe that we will see a fast decline especially if we break the major lows.

 

Bulls: Prices are getting closer to the prior lows where there should be major support so if prices are to hold the bulls could see a bounce there as a double bottom.

 

Bears: So far the price action is helping the bears, but there needs to be caution near the prior lows for a bounce. Prices have accelerated to the downside and we seen the breaking of several important support ranges. The support ranges of 770 and 740 are important so traders must watch there.  We should see a continued decline and it will increase with momentum.

 

Support / Resistance:

828-830 2^nd resistance

818-820 1^st resistance

785-787 1^st support

770-772 2^nd support

 

Notes:

I wanted to make a point of stating that I still feel prices will reach the 400 range soon, and feel strongly more than ever that this will occur. The economic crisis will continue and get worse leading to further selling pressure.  The banking industry along with other sectors will have further troubles. Panic has not come in yet and this should start to happen soon.  I have stated that a change of trend could occur on Jan. 26^th. and it may be a low. This of course is dependant on the prior days price movement.

 

I have included a chart of yesterday’s trading because it seemed that some were confused by the trading action. Traders must keep things simple and this will help keep your eye on the correct trend.

 

Gannfann

Chart of Jan. 20th

"So help me God"

Friday:

 

The S&P tested the 61% retracement and bounced off the support range on the 5 minute chart and it can be seen on the chart I posted.  

 

Today:

 

Prices should have a corrective move or a retest of the support ranges and of course the 850-852 range is still important. Prices are still under the 50dma and my contention is that prices will retest the prior low and start to break soon. Look for a possible change of trend to on Jan. 26^th and it may be the low. Traders need to watch for the potential double bottom formation if prices retest the prior lows.

 

Bulls: The bulls need prices to break the 850 range and hopefully trade above that range. It would be a positive if prices were to rally with momentum and close above the 50dma. The bulls could see a mid day rally after the President Elect is sworn in.  

 

Bears: Prices have been moving favorably for the bulls as prices are holding the 850-857 ranges and is under below the 50dma.  There have been some key reversals appearing on multiple time frames and sector so this could be a sign of a break.  Prices are looking weak on the rallies but traders must watch for a possible mid day rally due to the inauguration. If prices break to the downside and retest the lows traders must watch out for the potential double bottom pattern.

 

Support / Resistance:

 

869-871 2^nd resistance

856-858 1^st resistance

837-839 1^st support

818-820 2^nd support

 

Notes:

 

I am seeing a possible change of trend that could occur on Jan. 27^th. And traders must be mindful of a possible double bottom. We are starting to see the signs of the primary trend resuming.

 

 

Gannfann