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LOOK OUT!
We got the big move up that we were expecting...and it looks like the start of the big move down. Today's candlestick pattern looks like a reversal could be underway...at least for a little while (see chart 1). The gap 
up and run up this morning was impressive, but the sharpness of the drop near the end of the day was a cause for concern. Over the last few days the buyers had been coming in every time the market dropped. Today they decided to sit on the sidelines. The GDP report comes out tomorrow morning. Perhaps buyers wanted to wait to see whether or not things are improving. Today's late session sell off did form a possible bullish ABC pattern which could mean we might have one more attempt for the S&P 500 to get above 1000 (see chart 2). However...the bigger context of today's move makes me doubt that it is a bullish ABC pattern. I'll be watching the price action as soon as the market opens. We should know early on which direction we'll be going. If we gap up or rally up to the 990 level on the S&P 500, I think we will make a run for 1000. If we break below the previous resistance (now support) around 982, I think our correction will be underway. Remember though...I don't know the future. I'm just looking at some of the probabilities. If we do sell off, I don't expect it to be a huge mo
ve. There are a lot of buyers that are eager to get into this market but have been afraid to enter at these elevated levels. Some of you might be included in that list. I still think the safest play for most of you would be to wait for the pullback and start looking for stocks you would like to get into. I think the 950 area would be a good target for the possible pullback.
up and run up this morning was impressive, but the sharpness of the drop near the end of the day was a cause for concern. Over the last few days the buyers had been coming in every time the market dropped. Today they decided to sit on the sidelines. The GDP report comes out tomorrow morning. Perhaps buyers wanted to wait to see whether or not things are improving. Today's late session sell off did form a possible bullish ABC pattern which could mean we might have one more attempt for the S&P 500 to get above 1000 (see chart 2). However...the bigger context of today's move makes me doubt that it is a bullish ABC pattern. I'll be watching the price action as soon as the market opens. We should know early on which direction we'll be going. If we gap up or rally up to the 990 level on the S&P 500, I think we will make a run for 1000. If we break below the previous resistance (now support) around 982, I think our correction will be underway. Remember though...I don't know the future. I'm just looking at some of the probabilities. If we do sell off, I don't expect it to be a huge mo
ve. There are a lot of buyers that are eager to get into this market but have been afraid to enter at these elevated levels. Some of you might be included in that list. I still think the safest play for most of you would be to wait for the pullback and start looking for stocks you would like to get into. I think the 950 area would be a good target for the possible pullback. 
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