March 24, 2005: Gartley's M

After close analysis:

After a move up till approx. 1pm, the market consolidated and reversed to the downside for the rest of the day. I recognize that this was how 2001 and 2002 used to be - just persistent downmoves with no signs of stopping. The break of dbl. hump on NQ isn't something to be underestimated especially following few months of going nowhere (aka cnsld). Daytrading wise, it's still very good with clear moves in both directions. Same plan as yesterday, keep watching the b/o pattern on semis, 1160 area on ES, and AB's 605. I'm anticipating a dip early next week then a bounce up if the H&S pattern were to play out.

Observation(s) of the day: the 4-bar descending pattern (might call it 4 feathers pattern) on Addq provided excellent confirmation for a short trade (6 bar b/o).

Market breadth formed an M pattern today. Add and Addq opened higher than previous couple of days but reversed course towards end of day. Vold was +ve but nothing to talk about in terms of strength which is typical PA on a cnsld day. All 3 closed with -ve xover.

Futures tried a mini rally in the morning and met ema resistance. On the charts it's clear that there're multi-day consolidation patterns taking place at the moment signaling the next major move. AB rallied to it's ema (within ema zone) and just reversed back below that zone. NQ and ES rallied above their emas, consolidated, then broke down below it. ES200R still in bearish zone.

Indices might be the story of the day with their multi-day cnsld pattern. Smh/Sox rallied above their emas only to hit resistance at neckline. This might turn out to be the deciding factor on where the market will be going for at least the short-term. Dow was in multi-day ascending channel pattern and finally broke down before the close.

Overall positive day!