By John Pisanchik

Hello everyone, this is my first commentary for 2010. My last one was for Dec 31, 2009, and what I said there still holds true now. The market has lost it’s momentum, and what is really important here is that the market has hit a very important Fibonacci retracement. That really puts a substantial risk to the downside in place. Another important thing is this, since Jan 1, the market tried to rally. It made new highs and then fell back below the top of the trading range that was in place. The fall off was hard and the market never recovered. In fact it fell below all the critical support levels that were in place.

What should be the strategy now for the intermediate term? Well, the market is set up for a correction. If it happens, it will be substantial. So pay close attention to what is going on now. The 1100 level is a very important resistance level in the S&P Cash Index. The market fell below that the other day and was not able to get back above it. If after continued attempts to break it to the upside, it fails, then place a hedge on your portfolio. Happy Trading.

Filed under: Market Opinions

Like this post? Subscribe to my RSS feed and get loads more!