S&P 500 Index (SP500)

[DiscoverGold]

Amateur Investors: Weekend Analysis

* Saturday, January 23, 2016

The S&P 500 fell 13% from late December until a short term low was made on Wednesday. Since 2009 each time the S&P 500 has corrected 10% or more the 5 Day Average of the Put to Call Ratio has risen above the 1.25 level (points A). With the latest drop of 13% the 5 Day Average of the Put to Call Ratio didn't reach the 1.25 level. Of course that doesn't mean it has to reach the 1.25 level to signal a major bottom. However I would be more confident that Wednesday's low was a major bottom if the 1.25 level had been reached based on past history.



Meanwhile the S&P 500 held support this week along its long term upward trend line from the 2009 low. Also notice the 23.6% Retrace from the 2009 low of 667 to the 2015 high of 2135 is at 1788 so there is a major support area near the 1800 level. If the 1800 area fails to hold in the weeks ahead the next major support level appears to be just below the 1600 level. Notice this is the 38.2% Retrace from 667 to 2135 and coincides with the 2007 high (point B).



Finally for those wondering about the price of Oil the chart below shows prices since the mid 1940's in terms of Real Dollars. The first thing to notice is that the action since late 2008 appears to be a large "ABC" correction. The worst case scenario is that "C" will bottom around $20. Also notice since the mid 1940's that Oil has always found support near the $20 level so this is a major long term support area.



http://www.amateur-investors.com/AII_Weekend_AnalysisJan_23_16.htm

• George.

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