The S&P 500 Index (SPX) 07-05-10

The S&P 500 Index closed down at 1022.58.  The situation here is a little different from the INDU.  The death star has taken place here.  The 50 day moving average is at 1111.66 and the 200 day moving average is at 1111.77.  Crossed, but not by much.  Like being just a little bit pregnant.    Price has gone through the first price objective for the move down and is heading for the second price objective at  997.50.  For price to start higher it would have to go through 1054 and then the first price objective for a move higher would be 1098.  Pressure is up on the daily chart and with Friday’s action it is trying to turn down again.   The indicator is in the over extended area of the chart. 

The Dow 30 and the S&P 500 Index (INDU & SPX)

The Dow closed up today at 10309.24 up 40.43.  There is still upside pressure being applied to price and the indicator is moving into the over extended area of the chart.  The price objective is 10343 and one would expect to find resistance there and a retracement of this move higher.  At least there should be a congestion area.   This is the first time in a long time that the dollar and the Dow went in the same direction.  Could the coupling be over for the time being?  Somehow I don’t think so.  We shall see tomorrow if one or both of them move in the same direction.  For price to start down again it would have to go through 10095 and then the first price objective for this move down would be 9873.  Which is just above the past support level for the longer term cycle retracement down at 9814.  The S&P 500 index (SPX) is in about the same condition.  Price there is reaching its first price objective at 1105.9 and the pressure is still positive.  The indicator is in the over extended are of the chart.  For price to move lower price would have to go through 1073 and then the first price objective would once again be 1046.

The S&P 500 Index (SPX) 02-13-10

The SPX closed Friday at 1075.51 down on the day.  There is still upside pressure being applied to price, but price can’t seem to get a foothold to move higher.  It has gone through the entry price for the move up that has its first price objective at 1105.90.  Price found support at the first price objective for the move down at 1046.  The lower time frame charts have price objectives and targets in the 1085 area with the highest target at 1094.  All below the 1105 level.  All three time frames that I looked have upside pressure being applied to price so if you are short right here be careful.  It doesn’t seem that price wants to move much higher, but time and some announcement will tell.

 

60 Min. Chart for the SPX ( S&P 500 Index) 02-09-10

Price went through the daily chart entry price.  Now the question is if it is a false entry.  One of the ways to tell this is to look at the other time frame charts.  In this case we shall look at the 60 min chart.  We find that price found support at the second price objective for the move down at 1045.  It has since retraced up to the second price objective for the short cycle move higher.  This should offer temporary resistance.  Price should form a congestion area or move lower in a retracement of this up move.   The target price for this move up on this chart is 1082.  For a move down to start price would have to go through 1063 and then the forst price objective for this retracement would be 1049.  The other thing to note is that price is in a channel move lower and that channel has not been broken.  One should also look at the dollar.   These two items still have not uncoupled.   On the 60 min chart there is divergence at the high and there is currently downside pressure on price.  That should mean that the entry price on the daily chart is a false entry for now.  One would need this down channel to be broken along with the other technicals to confirm this entry.  Even though we have had a gap opening this morning and a 13.78 point move up in this index doesn’t mean that the bears have gone back into hibernation.  As long as there is doubt that the European central bank will bail out Greece along with Italy, Spain, Portugal and Ireland, the dollar should remain strong.  If that is the case than the markets will remain weak.  With a higher dollar all of our exports become higher in price and therefore detrimental to the US export business and the balance of payments.  And on and on and on.  I have included a dollar overlay for the daily SPX so that you can see the correlation between the two.

S&P 500 Index (SPX) 02-08-10

The SPX closed down today by 9.45 points at 1056.74.  The index tried to rally most of the morning and then fell apart late in the day.  It seems that the European debt problems and confusion about what could happen here weighed heavy on the investment groups today.  There is still downside pressure being applied to price, but the lows today didn’t reach the Friday lows so it appears that the first price objective at 1046 is still acting as support.   That level also is the second price objective for the short cycle shown in lavender.  For price to move higher it still has to go through the 1075 level and if that happens the first price objective for a move higher would be 1106.

The S&P 500 Index (SPX)

The chart shows the classic 50 day and 200 day moving average.  This has been noted over the years as a key to whether you were in a bull or bear market.  A break of the 50 day moving average was supposed to be a key to getting short.   Support was to be found at the 200 day moving average.  If you look back you will see that the 50 day moving average has been broken on three previous occasions and then the rally continued.  What is different now?  Before there was bad news every week, but it wasn’t as bad as expected and the market rose.  All the analysts guesstimates for earnings were low balled so everything was better than expected and once again the market rallied.  Now we are getting good news and earnings that are better than expected.  The US Dollar is rallying instead of dropping like a stone.  The future looks a lot rosier than it did a year ago and yet at every announcement the market falls into one abyss after another.  Just how bad have the numbers been altered to get a desired result?  How do you miss an employment number by almost 50%?  December’s number was revised to 150,000 instead of 85,000.  Who is monkeying with the numbers?  The unemployment number has come down below 10%.  Is that good news and has there been a trend change?  I don’t think so.  From what I have read and heard on the radio, there are over 2 million people that dropped off of the rolls and are no longer counted because their benefits ran out and they have just given up looking for work.  

  Last year, on another web site, I called for a rally into the new year and then Armageddon.  Has it started already?  I thought that it would wait until later in the year.   I now looks like the 50 day moving average can act as resistance to a rally rather than support.  If this indicator turns down and crosses the 200 day moving average you could have price drop below the March lows of last year.  At times I have been called a gloom and doomer and at other times an eternal optimist.  I don’t consider myself either.  I like to think of myself as a realist. 

Friday the SPX closed up about 3 points at 1066.19.   It found support at the first price objective for the move down at 1046.  The second price objective for the move lower would be 994.  For price to move higher it would have to go through 1075 and then the first price objective for a move higher would be 1106.  There is still downside pressure being applied to price, but there is divergence at the current low.  There is a short cycle target price for the move down at 1026.

I am using a full size chart so that one can look back as see where we came from on this move higher and where we can go if things break south.  Once again, just one man’s opinion.

 

S&P 500 Index (SPX)

Like the Dow, the S&P had a nice rally today.   The index closed at 1089.19 up on the day.  There is currently upside pressure being applied to price.  For the short cycle move to start price would have to go through 1103 and then the first price objective would be 1133.  Like the Dow, movement here is still dependant upon the dollar.  The downside price objective is still in force with a price objective at 1041. 

The S&P 500 Index (SPX)

The Indx closed down at 1073.87.  This was not a good week for the markets as a whole.  Price is moving down toward the first price objective at 1052.  The second price objective for this retracement down would be 1002.  For price to start a move higher it would have to go through 1102 and then the first price objective would be 1132.  There is still down side pressure being applied to price.  The indicator is in the very over extended area of the chart.  It tried to move up last week and was turned back.  From this level there should be at least a little bounce.  With many of the S&P 500 reporting this coming week a catalyst for this move might happen. 

The S&P 500 Index (SPX)

The S&P Index closed the day at 1092.17 down 4.61.  Price has broken below the up channel and found support at the entry price for a retracement down at 1093.   From the November lows price rallied into the Turkey Day holiday and moved horizontally for a while.  Then the next stage of the rally into what is called the Santa Claus rally.  The rally continued until the first of the year and then it started to unravel.   The move down has been 50 points so far.   There was congestion area during November and the first part of December that had a low of 1086.  So far this drop has not taken out that low.   That makes a lot of stock available between here and 1120 the high in that congestion area.   There is still downside pressure being applied to this index and the indicator is in the over extended area of the chart.  The key to this index is if price can once again get through that congestion area on the way up.  Price stopped short of the target for the longer cycle move up at 1159.  WE have either seen a massive distribution or a massive accumulation of the key stocks in the S&P 500.  Time will tell what is next.   In order for price to start another move higher on this longer cycle price would have to go through 1160.   A short cycle move higher can take place if price goes through 1119 and then the first price objective would be 1146.  You will note that that price will not trigger the entry price for the longer cycle move higher.