Intraday Commentary ~ 2/25/09

By
FocalEquity
– February 25, 2009Posted in: Intraday Commentary, Stock and ETF Models

3:55pm
Bears finally piling in at a double top level. Strong volume may mean, that these bears are here to stay.

2:48pm
This market is absolutely crazy. But out of voltatility and uncertainty, comes only one thing in the end. Bearishness.

2:12pm
Ideal case for the bears is to get a bear flag forming soon, and the ideal case for teh bears is a reversal candle here.
2:05pm
Reversal time, we got a huge 5 minute candle, with volume higher than that of a 10 minute candle. The bulls still have the upper hand, unless we break significant retracement levels, or we start forming some bear flags.
1:59pm
Market found resistance at the gap filler between yesterday’s close and today’s open. The market though has a bullish inclination, and if we end down only slightly today, we could be in for another few days of bullishness.

1:41pm
Double top formation could occur on the 61.8% retracement one the intraday move lower.

1:35pm
Strong up volume candles now for the 1 minute SPY, could mean the market has decided otherwise, not enough bears pressuring here, and we will retest higher resistance.

1:23pm
Market failed ot break 61.8%, which sent the market up higher, and we are now either forming a bull flag, or going to roll over and retest that head and shoulders level to finally break it. I’m again having a bias with the latter bearish scenario.

12:45pm
Market testing 61.8% retracement + head and shoulders neckline simultaneously. Volume is stronger now… we can get a break.

12:28pm
Huge reversal candle on the bond yeilds TNX on the 10 minute. SPY is falling but volume is light, you need to have more volume to break through the 61.8% retracement of yesterdays move.

12:01pm
There is both an inverse head and shoulders (WV) and a head and shoulders (MA) out there. The WV has a neckline at 77.80-78.20$, and can be seen best on the 60 minute SPY. The MA has ascending neckline at 75.80-76.00 and can be seen best on a 10 minute SPY. The $VIX.X seems to be consolidating for another move higher on the 1 minute, which may mean that the MA pattern will win.

11:53am
Market retraced 61.8% of the intraday mover lower and found enough resistance there. The 20 SMA 1 minute is holding support on the SPY, if that breaks you should go short. It just broke.

11:41am
Just noticed, bond yeilds broke out of their triangle pattern. It might be time to start shorting bonds.

tnxbreakout

11:39am
Market found support at the 61.8% retracement, as it seemed to be the most obvious price where bulls will pile up. With that in mind, the market could have now formed the right inverse shoulder. Although if the volume does not pick up soon, it’ll be retaken by the bears and then we will break the 61.8% retracement.

9:52am
Market is testing the 38.2% retracement of yesterdays’ move up… first hit provided support, but volume is potentially high enough for a retest and a break. I want to point out that the 61.8% retracement is also the same level of the peak of the left inverse shoulder, and that shoud be the ultimate support that will have bulls pile up at.

9:06am
The markets are showing a slight decline, with the SPY bound to open at 77$. This is not vounching well for the bears, as this could provide the V of an inverse head and shoulders. $79-79.20, will provide the strongest resistance today, as it is a 38.2% retracement from the moe of 87.50$, and it is also the top of a descending channel. Once that breaks, we obviously move much higher. That being said, If the market does start falling lower, the retracement supports of yesterdays move are the following:
38.2% : 76.65
50.0%: 76.25
61.8%: 75.85$

One small thing to keep in mind though, is last time we hit 750$, the market capitulated, and the next day the market completely reversed and shot much higher. We didn’t see that here, so it’s definetly not over.

About FocalEquity

Sun Tze is one of the founders of FocalEquity.com. After going through multiple transitions, Tze, Charlie Cheng and their new team are bringing new changes and features to the new FocalEquity.com in 2011. Tze is specialized in financial modeling and has a masters degree in Finance.