Goodbye... For Now?

I am announcing my hiatus from the blog. The time frame is unknown, so be on the lookout. Thanks for your readership and views.

Follow-Up

Today was an interesting day for the market. The market tried to climb higher in an up-trend, but failed to sustain at the end of the day, regardless of the record-high rate cut announced by the Federal Reserve of 50 basis points (0.5%). This is overall bearish and stays consistent with the overall long-term trend we are seeing. Below is some short analysis of the S&P 500 index:

(click for a larger image)

• Above I have drawn one of the descending trends that could have a possible resistance effect on the index, as seen today with the reversal at the end of the day when that price area was hit but resisted.
• The bottom line represents support the index has been experiencing. If the index makes it down to here, I would expect a lot of pressure to sell further down, since it would be the third time this area has been reached within a month. This would signify that the market wants to go lower. Short positions should be strongly considered at that point, if the index dips below.

After-hours futures are up 0.56% on the Nasdaq, 0.9% up on the S&P 500 and down 1.7% on the Dow Jones Industrial Average. This doesn't pose any significant threat, yet. If futures experience a spike in pre-market trading, then we could very well see an up day that would take the index above the descending resistance/support line I have superimposed above. Tomorrow should be yet another interesting day to see if we go higher and get into a short-term up trend, or break down lower, possibly to the 850 area again.

I advise against any directional positions at this point simply based on the fact that it is still unclear which way the market will go.

A New Trend?

The market reversed pretty hard today, cutting away quickly at my leveraged positions aimed at a further tumble in the market. I have closed all positions and I am waiting for a certain direction for the market to take, because as of right now it could go either way. It is very emotional and volatile out there, but this is where money is to be made if the correct directional position is placed. Below are some possibilities of what I think is to come:

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• These are some possible resistance lines in the current down trend of the S&P 500 Index; any of these could provide areas of resistance and will throw the market down in its current trend. The question is: where will it stop its current potential rally? If these lines are crossed, it could potentially fuel more confidence and more buying, propelling the index to higher price levels.
  
• MACD is possibly making a bullish cross-over as seen by the lower circle. This could also signify resistance and we could see a down day tomorrow as the MACD bounces back down to bearish territory.
  
• RSI is still relatively low and could easily move into the 50 area or higher, signifying further upwards movement in the index. The RSI is the only indicator on here that is showing big potential for another up day, or two, since it is already close to oversold territory. It would take quite a bit of confident selling to send it lower than where it is currently.
  

(click for a larger image)

• Horizontal lines represent possible support/resistance areas where a lot of price action seems to happen lately. These could also prove to be resistance areas in this current potential rally.
• The symmetrical triangle shows a break-down into bearish territory within the last couple of trading days, however yesterday's big jump could potentially lead to a reversal of this break-down. As a note though, it has not climbed back high enough to the apex of the triangle, so it doesn't hold any solid strength of reversing this bearish break-down, yet.
• A key thing to watch here is tomorrow's mid-day action as the index could reverse as it hits the 960 area, where the apex or point of the triangle is, which is a support/resistance area in itself.
• Another key aspect to monitor is the index dipping back down below the 900 area, which will signify a continuation of the break-down from this triangle.
• Obviously, if the index goes below 850, then it is a time to throw in some major shorts, as the index tumbles to new relative lows in this bear market, which could continue for another week or two.
  

Good luck out there!