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Sunday, June 08, 2008 3:40:16 PM
Amateur Investors Weekend Stock Market Analysis (6/7/08)
http://www.amateur-investor.net/Weekend_Market_Analysis_June_7_08.htm
Over the past few weeks daily volatility has been on the increase with substantial moves occurring in both directions as shown by a 30 minute chart of the S&P 500. I see no reason why this type of action won't continue for several more weeks as the market makes large moves in both directions.
As for the major averages the Dow which completed a bearish looking Double Top pattern a few weeks ago has now dropped back to its 61.8% Retracement Level (calculated from the January low to the May high) near 12200. If the Dow fails to bounce off of this level early next week then we many not see an oversold bounce occur until it drops back to its 76.4% Retracement Level near 12000 (point A).
As for the Nasdaq it also appears to be developing a potentially bearish looking Double Top pattern as well and closed right at its upward sloping trend line (black line) from the mid March low on Friday. If the Nasdaq fails to bounce off its upward sloping trend line on Monday then it may have to drop back to the 2430 level before an oversold bounce occurs which is at its 50 Day Moving Average (blue line).
Meanwhile the Nasdaq 100 is now also exhibiting a potential bearish looking Double Top pattern as well and is right at its upward sloping trend line (black line) from the mid March low. If the Nasdaq 100 fails to bounce off its upward sloping trend line early next week then I expect it will drop back to its 50 Day EMA (green line) near 1945 before an oversold bounce occurs.
As far as the S&P 500 it has been encountering resistance at its 200 Day EMA (blue line) the past two weeks (points D) and broke below a key short term support level at its 38.2% Retracement Level on Friday around 1370 (calculated from the mid March low to the May high). The next support area for the S&P 500 would either be at its 50% Retracement Level near 1348 (point E) or at its 61.8% Retracement Level around 1327 (point F). More than likely the next significant oversold bounce probably won't occur until one of these levels are reached which could occur at some point next week.
http://www.amateur-investor.net/Weekend_Market_Analysis_June_7_08.htm
Over the past few weeks daily volatility has been on the increase with substantial moves occurring in both directions as shown by a 30 minute chart of the S&P 500. I see no reason why this type of action won't continue for several more weeks as the market makes large moves in both directions.
As for the major averages the Dow which completed a bearish looking Double Top pattern a few weeks ago has now dropped back to its 61.8% Retracement Level (calculated from the January low to the May high) near 12200. If the Dow fails to bounce off of this level early next week then we many not see an oversold bounce occur until it drops back to its 76.4% Retracement Level near 12000 (point A).
As for the Nasdaq it also appears to be developing a potentially bearish looking Double Top pattern as well and closed right at its upward sloping trend line (black line) from the mid March low on Friday. If the Nasdaq fails to bounce off its upward sloping trend line on Monday then it may have to drop back to the 2430 level before an oversold bounce occurs which is at its 50 Day Moving Average (blue line).
Meanwhile the Nasdaq 100 is now also exhibiting a potential bearish looking Double Top pattern as well and is right at its upward sloping trend line (black line) from the mid March low. If the Nasdaq 100 fails to bounce off its upward sloping trend line early next week then I expect it will drop back to its 50 Day EMA (green line) near 1945 before an oversold bounce occurs.
As far as the S&P 500 it has been encountering resistance at its 200 Day EMA (blue line) the past two weeks (points D) and broke below a key short term support level at its 38.2% Retracement Level on Friday around 1370 (calculated from the mid March low to the May high). The next support area for the S&P 500 would either be at its 50% Retracement Level near 1348 (point E) or at its 61.8% Retracement Level around 1327 (point F). More than likely the next significant oversold bounce probably won't occur until one of these levels are reached which could occur at some point next week.
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