Wednesday Evening 2 March 2011
Wednesday's activity says price could go either way. After the
wide range decline on Tuesday, there was not much downside
follow-through. The close was near mid-range, saying buyers
may have eked out an edge, at a point where they should not have. Intra day, buying efforts kept flagging, but sellers did not
press their side to take advantage, and that is the caveat at which
we are looking.
Mention is often made that previous resistance can become
future support. When we add a horizontal line, the case for
market direction may seem clearer.
In mid-January, there was a price swing high, and that area was
revisited again, at the end of the month. We drew a horizontal
line from that prior resistance, and it lined up perfectly with
Wednesday's low. In the last article, there was the second, lower
horizontal where we said the market may find support, and HOW
it was retested would be important information.
Unless there is downside follow-through in the morning, price
could rally back into what may become a trading range, with the
1342 area as the upper end of that range. Of course, price could
hold, initially, and then break support, the ways in which a market
will unfold is infinite, so we will just have to watch and respond
accordingly. the last sentence in yesterday's article allowed for a
possible wider swing top. .[See S n P - Just A Correction, Or
Change Of Trend?, click on http://bit.ly/fx9xTa, last paragraph.]
We are still partially short from 1323.50, and will adjust the buy
stop as market activity develops.