Yesterday:
The market rallied at the open hitting my forecasted target of 930 (929.58 actual high) in the S&P . It then went through a corrective move retesting the important lows in the 900 range. Here are my comments….
“Prices should continue their advance, and we may see a test of the 930-931 range. “
Today:
The employment numbers rose again by .4% and of course we are seeing a positive spin being placed within the media and analysts. This again in my opinion is window dressing to prevent sellers from coming into the market, while allowing big investors the ability to correct their balance sheets. We have just seen some of the result of the stress tests being done in such a public fashion. According to Reuters Wells Fargo is selling 6 billion in an offering with J.P. Morgan. In addition, we are seeing Morgan Stanley announced a 4 billion share offering.
We could see some selling start to take place today and we may see further corrective move. It is important to realize that this is a normal move, because you are seeing a possibility of a lower bottom being formed in and an up rally. Prices will need to gain strength to advance further, and it is normal to see pullbacks before further advances can be created. The important ranges of 931 with a violation there would see prices move two 940 range. In my opinion, this move needs a corrective move to take place if we are to see a greater move to 1000. Prices have been holding important support ranges and corrective moves have been creating higher bottoms so far without violating prior lows.
Support / Resistance:
928-930 2nd resistance
920-922 1st resistance
904-906 1st support
886-888 2nd support
Notes:
Traders need to watch directories here, and their overall commitment regarding trend direction since the trend is still technically up.
Gannfann
