Today’s Market Commentary Friday February 13, 2009

Well we had a huge market reversal yesterday off of the home mortgage news that came late in the day. We did get that 7700 level I was looking for in any weakness. If you look at the DJ on a daily chart you will notice the last 2 day candles. This pattern is what we call a “SHANGHAI DUO” = This is not in any book as a combination pattern, it was invented by David Elliott when he identified the combination pattern of a Doji and hanging man candlestick pattern as being an important TOP and BOTTOM indicator. Named after the Movie Shanghai Knights. This is a candlestick pattern of Jackie Chan and Clint Eastwood, Chan the Doji, and Eastwood the Hang em High Hanging man. The combination of these two candles at new market highs usually signals a sell signal. The signal is confirmed by price the next day. The combination of these two candles at new market lows usually signals a buy signal . The signal is confirmed by price the next day. SOAP, FLATS, and SNAP BACKS can also confirm these reversals. THIS WAS FIRST PRINTED IN DAVID ELLIOTT’S AET CLASSES, THEN PUBLISHED IN 2004 ON TCNET AND HIS YAHOO SITE.  So we will have to how we hold up today. Technically yesterday’s rally was just a short covering rally that closed most of the indices except the DJ at key resistance levels.  I do have 1 day sell signals and 2 day buy signals, which often indicates weakness in the morning and a rally in the afternoon.

DJ support comes in at 7700 and upside targets are 8000 and 8046. We did not get a new low close yesterday but we did put in a new low for the year. A new low close would indicate that we take out the November lows.

SP500 should find support at 825-830 and updise target is 840.14. Sp500 has to hold 800.

AAPL did get my 99.50 target yesterday and it still looks good.

*No positions as of this writing.*