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FED disappoints and the market is poised to fall

Today, the market dropped hard at the very end of the session reacting on FED’s disappointing announcement. Another news which helped markets to tank was a Moody’s downgrade of financial institutions such as Bank of America, Citigroup and Wells Fargo. I think this downgrade was a lot more significant then FED’s announcement.

I do not want to speculate over Moody’s downgrade report and its accuracy on their judgment. However, it looks to be a bit off and it won’t help much at this time. So where are we going now?

If you take a look at today’s trading range, a candle the market created, means a vicious trading and indicating a reversal. An extended bearish candle following a swing high (after a few days of rallying) signals a significant reversal. See similar candles at the beginning of June 2011, July 2011 and at the end of July 2011. All followed rallying market and signaled the top.

Based on that I am expecting SPY reversing and going back down to its support line at the trend line of the triangle (SPY at around $115), which may easily occur tomorrow and we most likely break that line. When we break down through that support at 115, we will go even lower and re-test $110 support level.

I am expecting the market to break that level too, but I cannot say for sure. Thus my target price for SPY is at $110 and then we will see.

0 responses to “FED disappoints and the market is poised to fall”

  1. Bobby says:

    Stock trading…

    […]FED disappoints and the market is poised to fall | Hello Suckers …[…]…

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