Market Summary

The SPY failed at the 110 price level and looks to be headed lower. In a move similar to the gap up opening of this shortened trading week, Friday saw a dramatic gap down move leaving a second Island Top formation in as many weeks. The news that Dubai World was putting off payment on a $59 Billion dollars in debt that was released to the media when US markets were closed for the Thanksgiving holiday sent world futures markets falling rather dramatically. Though markets regained composure when they re-opened off their worst levels still there was a gap down and that shook up investor confidence especially in the banking sector. Market short term sentiment has again turned bearish and market volatility shot up 20% on Friday.

In the image below on the 240 minute chart both the gap up and gap down are noted by the blue ovals. The prices between the ovals represents what may be called a Bull Trap, if in fact prices continue to decline. The Weekly chart shows what is called a Tweezers Top formation on the two recent red weekly candles at 111.69 and that is a reversal chart pattern. This means that there is significant resistance at that level and the path for least resistance for the markets is to trade lower, at least in the short term. I heard Warren Buffett recently say, "The next hour is uncertain but the long term is fairly certain." and the long term is still bullish. Click on image to enlarge.

The biggest gainer this week was the natural gas ETF UNG up nearly 10% for the week, though it is off the most for the year at -60% YTD. The biggest loser for the week was the China ETF FXI down -3.49%. Click on table to enlarge.