By John Pisanchik

Today’s market provided a small bounce early in the day to retest the 1050 level as a resistance point. The high was 1048 so the resistance came in on schedule. After that held, the market stayed in a very narrow range with the move on the day coming in during the last 30 minutes, closing at 1030.7 in the S&P 500 Cash Index. The next leg of the bear market has started, as far as I am concerned.

On May 26, 2010 I wrote: If we close below the 1050 level then 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.

I still hold this analysis as the most likely objective. The next leg of the bear market is here and I believe 942 is the objective for this leg. The variable I cannot predict is how long it will take to get there, however bear markets historically have rapid moves. Happy Trading

By John Pisanchik

The market closed below the all important 1050 level in in S&P 500 Cash Index, and the close was also below the lows set on 6/8/2010, 5/25/2010 and 2/5/2010. The weakness demonstrated over the last week is significant. With a break below 1050, the market will try to run at 1050 as a resistance point. This could occur overnight in the Asian and European markets via the futures contract. Don’t be surprised if the market opens with some strength to it. Do not be sucked into that because it is just a test of the 1050 level. More than likely the market will chop around from 1040 to 1050. for a day or two. If the 1050 level holds as a resistance point then we should see a rapid move down as the second leg of this bear market. Happy Trading.

By John Pisanchik

The market ended the week by marking time Although the close was a little higher that Thursdays close, the high and low of the day was lower than Thursdays. The market still looks weak, but has also entered into the zone of support. So the market will probably chop around a little in this area before it does anything decisive. Happy Trading.

By John Pisanchik

The market continued it’s move lower after a brief pause yesterday at the 9 day moving average. The market will most  likely continue in this direction on Friday and could potentially test the 1050 level in the S&P 500 Cash index. Depending how you look at the technicals here, one can call this a third bottom or a fourth bottom. If you consider the low set on Feb 5, 2010, then you have a fourth bottom about to be set in the current market.

There are a couple of things that you must look at here. First, the market was in a weak position and on June 8 started a rally that took the price action above the highs set in the downswing prior to that date. That rally took the S&P 500 Cash Index above the 1100 level and and the weakness came back and that level could not be held on the downswing and fell back into the previous range. When we broke above 1100, I warned that this was probably a head fake. As things unfold, it was a head fake.

So what does that mean to the trader. Well the market will go lower, to test the 1050 level soon. Probably Friday as I stated above. If the 1050 level does not hold, then the next leg of the bear market will begin. Happy Trading.

By John Pisanchik

I generally don’t update this blog with my analysis 2 days in a row, but I felt that today’s market action was important enough to post my opinion. Today saw follow-through from yesterday’s reversal, and it plowed through the important 1100 level in the S&P 500 Cash Index to close at 1095.3 . This is weakness that should not be showing itself if the market was really about to go higher, so I am looking at the recent rally as a head-fake. What will validate this is a retest of the 1100 level, but from the bottom side. In other words, the market may show some strength tomorrow morning and start to press against the 1100 level from the lower levels seen today. If the market cannot get above and stay above the 1100 level tomorrow, there should be weakness coming in as the predominant force. So if we close below 1100 tomorrow, the direction for the market will be lower. Happy Trading.

By John Pisanchik

The market staged a great opening this morning, on momentum from Friday. It was stopped dead in it’s tracks just under the 9 day moving average, approx 1132 in the S&P 500 Cash Index. My Friday report warned that there is strong resistance in the 1130 to 1140 range. So today the rally was stopped and it is starting to look like a reversal day. Tomorrow will validate that or not. If it is a reversal day, the key will be how much of a move down will this go. It could retest the 1100 level, but that level must hold if the market is going to move higher. If that level does not hold, and closes below 1100, then weakness should be the dominant force, and we could see the market go lower. Happy Trading.

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.