ChartsEdge map for 4/9

Market Map for Apr09

Posted: April 9th, 2009
Author: Mike Korell

Comments from Mike at Chartsedge: After watching the FTSE trade this morning, I believe there is a good chance that this chart will be inverted. This reversal has proven to be quite difficult.


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Folks, a personal comment of my own - with the Wells Fargo earnings news boosting it and some other bank stocks, the apparently improved outlook for banks should help economic confidence at this important time frame. We did see a pullback as Merriman had commented upon, and this morning we're now seeing that the market wants to test again the 833/838 Fibonacci retracement levels. If this effort proves successful, then once again we'll be looking to the 844 level we've mentioned. I did also see something written about the 881 level as being a Fibonacci retracement level (they didn't say which one and so I'll have to check it) from the market peak to the March 6-9 lows. Obviously, it will also be important to see whether the bounce in bank stocks is enough to get the banking index ($BKX) above the resistance levels we marked off and that proved too strong for that index to mount recently. Plus, don't forget the 3000 level in the Dow Transports - if they can mount that, then the 3300 level comes into focus for that index.

Mike refers to the reversal being difficult, and it's uncanny how his cycle forecasting - as he himself acknowledged - seemed to be adjusted as the markets reacted March 18 to certain Fed/Treasury actions. Was it really that action, or the planets, or the Armstrong economic confidence cycle, or the Fibonacci time frame of 1.382 years following the October 2007 peak? For a variety of reasons, there are certain cycles folks who are looking for the possibility of this bear market rally extending in both time and price ... but let's not forget there isn't great certainty about the start and stop of the rally. So for now, we're going to continue keeping up with the probabilities generated by those methodologies, while focusing on the market action at the 833/838 levels and, if above, the range up to the 884 area. As well as the time periods of going into opex on Friday next week, the late April time window, and then the late May time window. Exactly whether and how you play these moves, depends as always on your investment/trading vehicles and time horizon.

As always - careful out there, happy market navigating all!