Daily Directional Forecast:

Mohan's Market Force Daily Directional Forecast
by Mohan

October 19, 2009

Market Force: Neutral/Bearish. The market continues to appear ready to sell off. Holding steady under 1077.50 suggests a stronger move lower anytime. There is still a chance we could see support come in just above 1073 and try to rally back as per the drill lately.

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Recap of Friday's Action:

Good morning and welcome to Monday's trading action.

I hope you had a nice weekend. On Friday our Directional Forecast called for a lower move in the markets with prices holding in general under 1088.00

Prices dipped below that level on the opening and continued in a stronger dive lower to just under 1078.00.

Prices hit the Hour One lows with a Mega Bearish tape setting up an Intra Day Swing Trade short. However, inspite of the Mega Bearish tape prices held up. Later they bounced back higher as seen on the chart above stopping out the short.

The problem with going short on the B/D was the fact that the market had already sold off in pre market the 1095 area down towards 1081.00 which was a substantial drop already.

The bullish rebound was typical of the markets these days and makes it difficult to make sense out of the markets lately. We had a Sell day in the Sequencing Pattern with a Mega Bearish tape yet prices will not hold lower.

We can see on the chart above that after prices bounced back to Key 1088 exactly they hit the skids into the final closing period and ran all the way back down to 1081.00 confirming the Directional Forecast.

More on today's trading strategy below....

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