Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21
Is This the "Kiss of Death" for the Stocks Bull Market? - 14th Sep 21
Where Are the Stock Market Fireworks? - 14th Sep 21
Play-To-Earn Cryptocurrency Games Gain More and Is Set to Expand - 14th Sep 21
The CashFX TAP Platform - Catering to Bull Investors and Bear Investors Alike - 14th Sep 21
Why every serious investor should be focused on blockchain technology - 13th Sep 21
SPX Base Projection Reached – End of the Line? - 13th Sep 21
There are diverse ways to finance the purchase of a car - 13th Sep 21
6 Tips For Wise Investment - 13th Sep 21 - Mark_Adan
Gold Price Back Below $1,800! - 10th Sep 21
The Inflation/Deflation debate wears on… - 10th Sep 21
Silver Price seen tracking Copper prices higher - 10th Sep 21
The Pitfalls of Not Using a Solicitor for Your Divorce - 10th Sep 21
Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
This Boom-Bust Cycle in US Home Ownership Should Give Home Shoppers Pause - 9th Sep 21
Stock Market September Smackdown Coming Next? - 9th Sep 21 - Monica_Kingsley
Crazy Crypto Markets How to Buy Bitcoin, Litecoin for Half Market Price and Sell for TRIPLE! - 8th Sep 21
Sun Sea and Sand UK Holidays 2021, Scarborough in VR 180 3D! - 8th Sep 21
Bitcoin BTC Price Detailed Trend Forecast Into End 2021 - 8th Sep 21
Hyper Growth Stocks - This billionaire is now using one of our top strategies - 8th Sep 21
6 common trading mistakes to avoid at all costs - 8th Sep 21
US Dollar Upswing, S&P 500 and Nasdaq Outlook - 7th Sep 21
Dovish Assassins of the USD Index - 7th Sep 21
Weak August Payrolls: Why We Should Care - 7th Sep 21
A Mixed Stock Market - Still - 6th Sep 21
Energy Metals Build Momentum; Silver & Platinum May Follow - 6th Sep 21
What‘s Not to Love About Crypto Market Fireworks - 6th Sep 21
Surging US Home Prices and Gold – What’s the Link? - 6th Sep 21
S&P 500 Rallies To New All-Time Highs – Are The Markets About To Break Higher? - 5th Sep 21
Bond Conundrum - Boom or Bust for Gold? - 5th Sep 21
How the sale of a Sting CD sparked an Entire Online Industry - 5th Sep 21
Three Years of Fresh Thinking With Scott Dylan and Dave Antrobus - 5th Sep 21
Bitcoin Bear Market Trend Forecast 2021 and Model Crypto Portfolio Buying Levels - 4th Sep 21
The Most Actively Traded Companies on the Toronto Stock Exchange - 4th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

S&P 500 Trend Analysis, Techies Holding the Market Back

Stock-Markets / Stock Index Trading Dec 14, 2009 - 05:01 AM GMT

By: Piazzi

Stock-Markets

Best Financial Markets Analysis ArticleEarly Friday, futures seemed like all the rage in the low volume hours, pumping it ahead of retail numbers. After the numbers, techies took a good dump and that kept a damper on S&P for the day – Party Poopers!


This is a 20-min chart of March NDX minis

There is a potential Inv H&S on the chart. We’ll see.

Despite the early drop of the techies, S&P held its ground and didn’t budge. Nothing changed and the 1080-1110 range dragged yet another day

As long as index holds within this range, it has a chance of gathering energy to launch another attempt for a break to the upside.

The weekly picture has remained the same

Still knocking at the 2007 downtrend line and needing that extra bid required to push it through. If we break to the upside, pay attention to daily volume and breadth of the breakout, and how the whole thing (price, momentum, volume, breadth) behaves in the days after the breakout.

Friday’s volume was below average. Breadth was good

On Dec 5, I pointed to the number of new highs as a positive development. That gauge is still doing well. In addition, A/D line finally broke to the upside and recorded a new high.

Both McClellan Oscillator and the Summation Index recovered a bit on Friday

Overall, the breadth picture has shifted from neutral-to-negative to neutral-to-positive. That is nothing special in the upper half of a range that has been in effect for more than a month. It gives a launching pad to a break above the range and will be supportive if the breakout happens, but the breakout has to happen

Late October, we were studying the cyclical momentum of the index (CCurve) as it was showing signs of weakness.


 
Late November, CCurve started to turn up and I said that the peak after that turn would be important. That peak came higher than its predecessor. Now, CCurve is turning up again from a low that is higher than the prior low. This suggests that another momentum cycle may be forming to the upside. It is only a suggestion but, given the improving breadth, and the inability of the bears to cause damage, I’d rather give the bulls the benefit of the doubt – it is still their market.

Something very interesting is happening with the bond ETFs that I follow. Before looking at them, let me emphasize that, to me, at this point, all debt is junk regardless of who has issued the debt or what rating is plastered on its face.

Government bond ETF, TLT, has been very weak

The so-called high quality corporate bond ETF, QLD, has seen a few days of selling on high volume.

Notice that it ran into sellers at the same level as it did late September

The lower quality bond ETF, HYG, on the other hand has been doing well in terms of price, but not in terms of volume

There seems to have been a shift is resilience from the supposed quality of the treasury ETF to the lower end of corporate ETFs. If, and that’s a big if, this is a renewed appetite for risk, it is coming after 8 months of a market rally. Short term, it is in line with slightly improving breadth and the turning momentum cycle mentioned above. Longer term, it may, I, emphasize, may be setting the stage for a final run and a distribution top – definitely something to keep an eye on.

Let’s Wrap UP:

Index bounced from the lower edge of the 1080-1110 range and is poised to test the top of the range again.

We are entering a period of seasonal strength that has seen many Santa Clause rallies in the past

In June, index looked heading for a good drop, or correction, but it turned around without giving much and rallied. In November, Index looked very weak internally and cyclically, it looked ready to break, but it recovered without giving much. It has been my proposition for months that the bears of the last drop (before March) have been little significance to the market action (other than providing timely squeezes for rallies), and I think they are totally out of the game at this point. Market needs new bears with capital and conviction. So, the question is if those who can short with capital and conviction did not do so in July or November, why would they aggressively sell here in December with Santa and year-end-bonuses on the horizon?

This week is an Option expiration week. We will also be treated to another round of Fed meetings and announcements. So, I expect quite a bit of craziness, and bouts of price gymnastics. My plans are just to focus on the ongoing range and ignore everything else.

If I wanted to short, I could do so here that the risk is low (risk is a a break and close above the range), perhaps using options 2-3 months out.

Support is 1090, 1061 (a tough pivot for the bears so far) and 1041. Resistance is 1107 (a tough pivot for the bulls so far), and 1133

There is no short term trend on S&P, just a choppy lateral move. Mid-term trend is up. Long term trend is down.

Have a Nice Day!

By Piazzi

http://markettime.blogspot.com/

I am a self taught market participant with more than 12 years of managing my own money. My main approach is to study macro level conditions affecting the markets, and then use technical analysis to either find opportunities or stay out of trouble. Staying out of trouble (a.k.a Loss) is more important to me than making profits. In addition to my self studies of the markets, I have studied Objective Elliott Wave (OEW) under tutorship of Tony Caldaro.

© 2009 Copyright Piazzi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in