11/10/2008 Market Recap: The Support

Cobra's Market View Private Messaging System shows:

There is not so much to talk about today.  As mentioned in the weekend report, today's market action can only reveal that the up strength is weak, and it could be a chance to flee away should the market go up tomorrow.

1.0.4 S&P 500 SPDRs (SPY 15 min) the pattern looks like a Bullish Falling Wedge and it seems going to breakout soon.  So the market might bounce back up tomorrow.  Also look at the green circles, every time the market reaches the support it always bounce back up with increasing volume.  Therefore today's low is a very important support, and one should keep an eye on it.  1.1.6 PowerShares QQQ Trust (QQQQ 15 min), 1.3.6 Russell 2000 iShares (IWM 15 min), besides Bullish Falling Wedge, MACD and RSI also show positive divergence.


7.0.6 Trend Strength Watch.  According to this chart, even if the market rises sharply tomorrow,  it still means the upward momentum is relatively weak because the loss of two down days is covered by three up days.  Therefore if the market rallies tomorrow, it could be good chance to sell short.  On the other hand, if the support in 1.0.4 is broken tomorrow, the next support will be Oct 28th low.  Therefore, the potential breakout should be a chance to sell short too.


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