Week of Nov 17, 2008:

Monday - Tuesday - Wednesday - Thursday

Archives

Tuesday, Nov 18, '08: 

Good evening,

The markets enjoyed a pretty volatile session within a 4% range and most indices gained a little bit of ground, which of course means that the all-important support levels have held. Volumes were average or just above, which is slightly better than what has been seen for most of the past couple of weeks.

All in all, there has been no resolution to the stalemate that the bulls and bears have found themselves mired in over the past week or so.

It is impossible to say whether today's reversal from what was a 3% down-day to a slightly positive day on average volume is a "reversal" day or just another in a sequence of bull traps that have been laid over the past several weeks/months.

Despite the fact that we get a little more nervous with each passing day, the charts force us to give the bears the benefit of the doubt and the bulls the burden of proof.

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The following comments are relevant to each of the indices, so we won't repeat them after each of the charts below...

~ The lower Bollinger Band is still falling.

~ Prices have closed (just) above crucial support, despite trading below that level intraday.

~ Volumes are average, at best.

~ There are no confirmed buy signals whatsoever.

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It is a wait and see game at the moment. Neither the bulls nor the bears have total control of the short-term trend but that could change very quickly. Let's see what happens tomorrow... Options expiration is in three days.

S&P-500 Index - Daily Chart...

Dow Jones Industrials Average - Daily Chart...

Nasdaq-100 Index - Daily Chart...

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Have a good trading day tomorrow.

Goodnight.

Asher Pinto

Monday, Nov 17, '08: 

Good evening,

Over the weekend, we were hoping that the markets would find some resolution by the end of today's session. Either a big downward move that took out support or an upward move that pushed the indices was sought out. After a lower open, the indices clawed their way back to level with Friday's closing levels and even went slightly into positive territory for the session, before moving back towards the lows at the fag end of the day.

As of the close, the indices, in most cases, are sitting virtually as close to support as possible without actually having broken down.

Tomorrow's session is going to be very, very interesting.

S&P-500 Index - Daily Chart...

SPX closed at 850. That is bang even with the recent closing lows. Volumes were below average. The lower Bollinger Band has fallen a little further today and, as mentioned over the past few days, as long as the Band is falling, the bears are likely to have the upper hand.

That having been said, one cannot count one's chickens before they've hatched. Until support at 850 has been broken - on a closing basis - it has to be respected and will remain the last vestige of hope as far the bulls are concerned.

Dow Jones Industrials Average - Daily Chart...

The Dow closed slightly above its recent closing lows. Nevertheless, there are several other potentially bearish signs on the charts, not the least of which is the fact the prices are approaching the lower Band, which happens to be falling at this point.

Nasdaq-100 Index - Daily Chart...

NDX closed just below its most recent closing low and just above recent intraday lows. Price is now virtually at the lower Bollinger Band and with that Band now pointing downwards, the onus is on the bulls. If they can't get their act together immediately, it is likely that we'll see a break of support and quite possibly a sharp drop thereafter.

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The markets are back at the brink. Will they find support, once again? Or is all hell about to break loose? The longer term trend is with the bears and there is no evidence whatsoever that a longer-term bottom is in place. Even if there is a bounce in the near-term, we'd expect much lower prices within a few weeks. So don't fight the trend, unless you're holding period is very short.

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Have a good trading day tomorrow.

Goodnight.

Asher Pinto