By John Pisanchik

The Market is in a short term consolidation phase after beginning what I believe will be the start of a decline. There was a significant resistance level that held in at 1075 in the S&P Cash Index. The consolidation could last for a few more days before anything of importance occurs. If the market does get above the 1075 level, on a closing basis, then look for resistance to come in at the 1092 level and then again at 1100. If this is a consolidation before a decline, there should be a head fake or two, to the upside. Be very cautious of any market strength that comes in at this time. The likely hood is that it will be short live. The only way I will change my opinion of that is if we get above 1110 on the S&P Cash Index, and hold above that in a consolidation.

My original estimates of where the market is heading (published about 3 weeks ago) are 1079, 1020, 961, followed by 902, 847, 800 and finally 767. We already fell below the 1079 objective and have been consolidating below it. Once this consolidation is over and we break lower, look for the same type of market action just below the 1020 level.

Happy Trading.

Filed under: Market Opinions

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