The market (basis S&P 500) has found long term resistance at 1420. In the past 3 weeks price has mapped out a structure which defines it as a technical top (stage 3 distribution). Stage 3 distributions are events that occur over a period of time…
Since November 2011 the market basis S&P 500 has progressively changed from an evolving bear market to something else. Although the fundamentals out of Europe weigh heavily on global markets, the technical picture is somewhat different. Throughout November we started to view the market as an accumulation phase, but now…
The last trading session in the US saw the confirmation of an “M” top basis $SPX. Two nights ago it was the financial sector basis XLF – ETF that displayed an “M” top first and we consequently consider this the weakest sector. An examination of stocks that make up this sector confirms this view…
The market (basis $SPX) has traded up to a flattening 200 period SMA and has met short term resistance. This coincides with a 0.0618 Fibonacci retracement of the range, as defined by the May 2011 high and the Oct 2011 low. Other notable points of resistance not shown on the chart below are the March and [...]
By definition a bear market displays a series of lower highs and lower lows below its downward sloping 200 period SMA with price at a level 20% below its high. The market basis $SPX is currently trading below its downward sloping 200 SMA but is not at a level 20% below its high.
The market basis $SPX has continued to confirm an “M & A” top. “M” tops on many sectors confirmed last week (22nd Sept). For the first three sectors to fail see last week’s blog. Currently the most important feature of pattern development is the near confirmation of the “A”.
Five weeks are past and the market (basis $SPX) is showing signs that it will not achieve a rally up to 0.618 forecast retracement of the range as defined by the July high (7th July) and the August low (8th Aug). Three sectors (ETF- XLB, XLF, XLE) confirmed “M” tops last night.
In a backdrop of weak fundamental global economic news, the S&P 500 is continuing its counter trend rally in a low momentum move. Anecdotal evidence suggests that low momentum moves resolve themselves in trend failure which is often quite pronounced.
The S&P 500 has carved out a solid low in the form of a well defined double bottom. This confirms that a counter trend rally is in place. The previous counter trend rally in July took approximately 5 weeks. Working off the August 9th low this would enable us to estimate that mid September…
The S&P 500 traced out a well defined “M-A” top pattern. The “A” turned out to be only a one day rally, but from that came the fastest rate of change in price to the down side. The S&P 500 is now in its capitulation phase and within the next two days we should see a bottom forming.
