Today's most important key level

The S&P put in a somewhat similar performance but ended further in the minus column. It too is stalling short of its old highs.

So What Do We Do? As I preach, follow-through is key. Last Friday, I was very encouraged about the market's action. Since then though, it hasn't gained any more ground. As mentioned above, this action has it stalling short of its old highs. For those keeping score, this stalling action is near the .786 retracement level. Needless to day (I've always wondered, if its needless to say, then why do you have to say it?), it's important for the market to make it though this resistance level. I guess for the time being, this technical information doesn't matter since Google (GOOG | Quote | Chart | News | PowerRating) is trading over 70 bucks lower in after hour trading (no, I'm not making any more predictions here, I don't feel like eating another hat!). This will likely weigh heavily on the market. Therefore, if the market can shrug this off and trade back above the aforementioned resistance, we could have a bona fide bull market. I'm concerned that it won't be able to do this though.

As far as setups, as mentioned recently: while you're playing "wait and see" with the market, it's usually a good idea to look to commodity related areas since they can often trade independently of the indices. These include gold, metals & mining, and energies. However, these areas remain overbought and are due to pull back. Therefore, trail and scale on existing positions here vs. initiating new ones.

Same Bat Time, Same Bat Channel

Wow, is it almost Wednesday already? I guess this is so much fun, I keep losing track of time. Anyway, on Wednesday February 1st, at 11:00 EST, I will be doing my weekly audio/visual interactive lesson. This week I'm really excited: In addition to discussing current conditions (e.g. those KEY levels mentioned above), we have a "protective stops on every trade" example, a "better than a poke in the eye" example, some "continued thanks for the fish" examples, and a plethora of other GREAT examples! Then, provided there are no glitches, I should have plenty enough time to take your questions on individual stocks or trading. Admission, as usual, is free (and many tell me its worth the cost!) but limited by the software. Email me if you need instructions (the same each week) or if you would like the archives for the past year or so (covering setups, money management, scanning, sector analysis, etc...).

Best of luck with your trading on Wednesday!