By John Pisanchik

Well, today fizzled! That all important resistance level of 885 (in round numbers), that I spoke of yesterday, held in the S&P Cash. The market did try to go higher, topping off at 888.70, but then came off and chopped around between the high and 884 for around a half an hour before it finally started to break down. Each time it went lower, it tried to rally, but failed, and we ended the day close to the days lows.
As I said yesterday, we needed to get above 885 and hold. That clearly did not happen. Tomorrow there may be an attempt to run at that level, but that is uncertain as a call. The fact is that this rally is getting tired, and extreme caution needs to be the operating basis here. We are still in a bear market, nothing has changed there, but we have been in a rally. If the 885 level could be overcome to the upside, it increases the chances of a continued bear market rally. The longer we stay below 885, the more likely the next move down will start.
So here is what to look for in tomorrows market. If the market is really bullish (which I don’t buy) it must rally straight away and get through and hold above the 885 level. That is not outside the realm of possibility, I just don’t think it is likely. So if weakness continues tomorrow, then there are a couple of support points to look for as the market trades lower in the short term. The first is the 863 (approx) level. This was an important resistance level on the way up yesterday, so if the market has some resilience, then this point could stop a decline. If that point does not hold, then the 850 to 855 range is the next band of support. The market spent some time chopping around there the other day. If 850 fails and the 847 level does not hold, then we open the door for a continued move down. On April 23, 2009, I said there are some levels that could provide some support and they are: (S&P Cash) 835, 830, 790, and 741. I am also going to include 701 as a point of support, however after that point it is free and clear for a straight shot to 670. Now, I am not saying that we are going to be at 670 tomorrow. I am saying that if the trend turns down, that would be an intermediate objective, (a few weeks) and these support points are important and should be watched. Please note that the 835 level is a key level, and breaking that to the downside would be extremely bearish. Well I did say that the market today and tomorrow should be exciting. I think it was today. Lets see what tomorrow will bring.

As an aside, If you like my commentary of the market, please feel free to leave a comment, I would appreciate it. Also, if you register by leaving your name and e-mail, (over to the right,) I can let you know when I have updated my analysis. Thanks and happy trading. 

By John Pisanchik

Well today was an important rally day. I would have liked to have seen this rally yesterday, but the rally did occur and I’ll take it. The run up today should be close to re-establishing the up trend (which started 3/6/09) and was broken on April 20, 2009. Now there is something very important that has to happen here, and that is follow through. Tomorrow’s market (4/30/2009) must continue this rally, and we need move up through 885. The reason is that there is a good amount of overhead resistence here. This is a big one at approx 885 in the S&P Cash. So tomorrow must get through that and hold it on any intraday testing. If the market get above this level and holds it, then the rally should have a short term objective of approx 910. There is a band of resistance between 910 and 930, so the market will have some work at those levels.
What happens if there is no follow through tomorrow (4/30/2009)? Well the re-establishment of this uptrend is fragile, so a failure tomorrow would point to the rally fizzling out. But lets not talk fizzle before it happens, either way, tommorrow and Friday should be exciting days in the market.

By John Pisanchik

Today was an unexciting day in the market. It opened with weakness, rallied early in the day, sat at the top of the intraday range, and in the last hour lost its ground. OK, so over the last couple of days, I have been talking about retesting the 850 level. That has happened today. In the first 60 minutes of trading, the S&P went to 847 in round numbers, then recovered. So one can say, aha, we completed the test, so let the rally continue!!! Well, not today. You see, a test should test the low and bounce back quickly, and hold the gains it made. This has not happened, so I am concerned about the quality of the test. In addition, if you look at the intraday activity, you can see weakness starting to come in on the 60, 30, 15, and 5 minute charts. When these are all consistently looking the same, it’s an indicator that the next move is about to happen on the daily charts. So in the daily activity of the S&P Cash, it looks weak, but the lower limits have not been violated. The intraday activity points to the market wanting to go lower soon. So what do we look for. Well, the 855 level is an important support level here, and it really should have bounced off of it, instead of sit on it. So if that does not hold, and there is not an immediate recovery the way we saw this morning (morning of 4/28/09), look for the market to start trading lower with support at the 847 level and next support at 840 level, followed by approx 836.Now, if the 855 support does hold, then the day will be a relatively uneventful day with the most probable range being 855 to 865. Happy trading.

By John Pisanchik

In my weekend analysis, I stated that the rally we saw late last week needed to hold the 850 level on a retest. That retest has started. We opened today on the weak side, rallied, then gave up the gains during the day. The Cash S&P closed at approximately 857 and we are probably going to test the 850 level on an intraday basis tomorow. A close below 853, is bearish, and weakness, should start to mount as the week goes on. If the level holds, then at some point the rally should continue. We are really at a crossroad here over the next 48 hours. I still am bearish, generally speaking, and I would be very cautious of any rallies that the market experiences. Happy trading.

By John Pisanchik

OK, so the market rallied on Friday, and that is very positive for a continuation of the rally. I stated in my article of April 23, 2009, that the market really needed to rally from that point and get above the 850 level in the S&P cash. It did that. On Thursday it closed at 851 and yesterday rallied to 861. Now, these levels have to hold, and since I view 850 as an important level, the market may just try to retest this level on the downside early in the coming week. This would be normal, but the level will need to hold, and then move higher, and with some gusto. Once that test occurs, (if it even occurs,) then we should see a short term objective of around 916. We will see what happens when that occurs. Have a great weekend all.

Regards,

John Pisanchik

By John Pisanchik

Hello everyone. I wanted to post this update, because I think the market may be coming to the end of the rally. Of course anything could happen, but the market does appear to be losing steam. In addition, the rally that started with the March 6, 2009 low (S&P) of approximately 670, broke trend on April 20, 2009. Now, what I need to see, if this is really a strong market, is for that broken trend to get re-established in the next day or so. That means the Cash S&P needs to get above the the 850 level and hold it. If it does not, then the next direction will be down, probably testing the lows set on March 6, 2009. There are some levels that could provide some support and they are: (S&P Cash) 835, 830, 790, and 741. After 741 it is free and clear for a straight shot to 670.

Well, that’s it, have a good trading day.

Regards,

John Pisanchik

Hi everyone. If you haven’t read my analysis of 4/16/2009, “Where is the Stock Market Heading,” please do, because that will explain my overall opinion of the market.

OK, so lets get to it. We are in a Bear Market, so yesterday’s market action is consistant with that. In my post of 4/16, I gave some potential objectives to the upside. That is not to say that we will get there, it is simply a statement that given a Bear Market, and given a rally started, those could be the objectives to the upside if there is truly strength in the market. Now ysterdays hit does show that there is a lot of market weakness. The weakness came in before we even tested the highs of 1/6/09. That does not bode well for moving higher in the immediate future. In fact at this point we are more likely to test the lows of approx 740 set on 11/21/08 than then the objectives I mentioned to the upside. If that breaks, then look for a new leg down. This morning is showing some pre-market weakness, so unless something unusual happens, I would expect to see more selling, or just less buying, over the next seveal days.

The Bear is alive and well!!

John Pisanchik

4/21/2009

So What Is The Stock Market Doing – Really – My Opinion

By John Pisanchik

So if you haven’t done so already, you have to ask, “Is the Stock Market still in a Bear Market?” Well in my opinion it it, and here is why I think so.

First of all, we have not had a real bear market, I mean the kind that make legends, for decades. So the large number of people involved in the equities market have experience only Bull Markets. If you look at the S&P 500, we had a high last year of about 1575, and not that long a go we hit a low of about 675. WOW. And during that time there were important stocks that lost over 90% of their value. In no uncertain terms, the market was pummeled. OK, so fine the market got pummeled, now you may be thinking it’s time to go up!, Well you are half right. It is time for the market to go up, but we are still in a bear market. The most likely upside objectives in the market (S&P 500) are: 1) approx 1020, 2) approx 1125, 3) approx 1230. We are currently in the 850 area. The appropriate thing is to examine the market behavior at each objective to determine if it has enough steam to get to the next objective.

If you look at those objectives, you could say thats a hell of a run, the bear market has to be over. No way! It is exactly this type of run that lures people in, and pow, the market goes down with a vengance. That is what a bear market is all about.

There is an expression on Wall Street, “Never confuse brains with a Bull Market!”