By John Pisanchik

The market performed very well this week and had an impressive rally that took it over the very important resistance level of 1100 in the S&P 500 Cash Index. In the early part of the new week, it may need to retest the 1100 level as a support point. That would be a very important test. So were does the market go from here. Well, the 1100 level must hold. Some of the market leaders are starting to rally so this is an indicator that the market as a whole may rally also. If this is the case we should see the market continue it’s rally early in the week. There is resistance in the 1133 to 1140 range, so there may be some choppy trading in that range. There is additional overhanging resistance at the 1150 level. Have a great week end and ……..Happy Trading.

By John Pisanchik

The market found support at the 1050 level in the S&P 500 Cash Index. It looks like the market will once again take a run at the 1100 level and challenge the resistance level at 1105. This area is a major level of resistance and we must wait and see how the market reacts to it. The market will show it’s hand Monday. We are still in the area of consolidation and choppiness between the 1050 and 1100 level. Happy Trading.

By John Pisanchik

Yesterday the market found some footing at the 1050 level in the S&P Cash Index, and the rally continued until about 2PM today. It met resistance at the 9 day moving average and then reversed. This is still part of the consolidation, however the rally highs are getting lower. Thursday’s market may still chop around these levels, however is the 1050 level does not hold, we should head lower and start the next leg of this decline. pay attention to 1050, because a close below that is bearish. Happy Trading.

By John Pisanchik

The stock market ended this week on a weak note. It is still in the zone of consolidation, which is between 1050 and 1100 in the S&P 500 Cash Index. The market on Monday will let us know if this is still in the consolidation phase, or if we are going to head lower sooner rather than later. The key point to look for is a close below 1050. If / when that happens, the next leg down will start, and we should get below 1000 pretty quickly at that point. Enjoy the weekend and Happy Trading.

By John Pisanchik

The market found some footing on Thursday and started a rally in front of the holiday weekend. Some important resistant points this rally will have to encounter are at 1106, then 1128 and 1149, in the S&P 500 Cash Index. Be extremely careful about this rally. As I mentioned in earlier posts, the only real participants in this market have been professional traders, and they are likely to simply cover their shorts for the long weekend. Once the shorts are covered, the rally will lose its steam. Happy Trading.

By John Pisanchik

The market found support yesterday at approximately the 1050 level in the S&P 500 Cash Index, which is a very important level. The market has bounce from that level and consolidated between there and approximately 1090. Today brought weakness late in the day. The market will likely continue to chop around these levels, however a close below 1050 will be very bearish and the next leg down will most probably occur. If we do close below 1050, here are some objectives that we can expect. The next real support level will come in at 1011 and we could see some form of bounce there. If that level does not hold, the next support level is 942. The 942 level is another very important point and could provide strong support even in a market like we are experiencing now. If that does not hold, then the next extremely important level is 876. The support points I have identified here are considered really significant points. There are minor support points along the way but there is no reason to identify them here. Stay defensive, and remember to hedge. Happy Trading

By John Pisanchik

The market continued it’s slide, breaking through important support points along the way. The market closed just a couple of points above the intra day lows from the Thursday melt down of 2 weeks ago. The next real support level comes in at the 1050 level. The next major support level after that is the 1000 in the S&P 500 Cash Index. The trend is down and if the 1000 to 1050 does not stop the slide then we will see the next leg down, which could get us down to the 900 area. It’s Friday today, so people will want to unwind before the weekend. The market volume is mostly from professional traders, so if they are short, it could support the market at the close. Happy Trading

By John Pisanchik

Friday’s market was confirmation that the break we saw last Thursday was not some fluke. The market will be heading lower, and at the very least, we should see the S&P 500 Cash Index head to 1050 in the short term. The market broke most of the important support levels and any rally attempts should be short lived. It is still not to late to hedge your positions if you are a natural long. Once we get to 1050, I will post the most likely objectives that we can see once the consolidation there is completed. Happy Trading.

By John Pisanchik

We should expect volatility in the short term, however, because of today’s market action, we may have seen the highs of what will be the consolidation from Thursdays decline. The rally we saw yesterday was lacking in real volume, relative to the decline and that is a bad sign if you are a bull. Beware the bear and take advantage of any market strength to close your longs or to put on a hedge. Happy Trading.

By John Pisanchik

The market ended the week on a really bad note and Friday’s market was consistent with the drop seen on Thursday. Market closes on Fridays like we saw here often times are followed by a weak Monday. There wasn’t any market action on Friday that indicated that this was going to reverse any time soon. The most likely action over the next couple of days will include volatility, so if you place any buy or sell orders, stay away from “Market Orders.”  After the volatility passes, the market will most likely test the lows of Thursday, May 6, 2010, of 1065 in the S&P Cash Index. That could happen this week or next, it all depends on how much consolidation will occur at these levels.

I have been very uneasy about this market for several weeks now and have been saying the best way to approach this market was with a “Delta Hedge.” If you took up that strategy, you are probably in good shape. Even though the market was rallying while I was calling for the hedge, the rallies were lackluster and did not move with conviction. This generally is followed by a deep and heavy drop. Thursday’s market was a deep and heavy drop, and it remains to be seen if that was the opening salvo to a new bear market. It may very well be, since the rally tops that we say prior were meeting Fibonacci objectives. If the market was going to overrun those objectives, it would not have dropped like this. Pay attention to the market action, and don’t discount any weakness as being temporary. Happy Trading.