My Market Analysis for 19/01/2010

The market tanked as expected on the last day of the week however it stopped right at the fibo retracement and fibo fan support for the S&P.

S&P daily chart


Dow daily chart


I believe the indexes are all at support now. But seeing how the markets tanked on Friday, it won’t be surprising to see some follow through on the downside today and tomorrow.

With the full year earnings season in full swing now, a lot will depend on earnings (especially the banks) and the market’s expectation of the companies’ earnings. Citibank and Intel will be reporting their earnings today followed by Wells Fargo and Bank of America tomorrow. Goldman and Google will be reporting their earnings on Thursday. We shall see whether their earnings will be as disappointing as JP Morgan’s last Friday.

Personally I feel that the bounce in the last hour of trading on Friday should be the end of last Friday’s tank and we shall see the indexes move back up to their respective highs in the next few days.

However this does not mean that the market will continue its rally but that with the increase in volatility, we shall see bigger and wilder swings in the markets for the next few weeks.