Monday, October 10, 2011 4:26:23 AM
$SPX - A Bull In A Stack Of Hay?
Depending on the time frame, there is a quite a wide range of definable support for this benchmark. The good news is that the recent bearish pressure is tapering off, and the SPX's SML, MID charts are also pointing towards a tapering of the recent downtrend.
From a purely structural standpoint, there remains some room for the bear trend to reverse (See: Chart #1 below, where historical structural levels are defined)
From a harmonics standpoint, I would consider significant support to occur at the convergence of two historically significant Fib levels (See: Chart #2 below). This chart also prints a speculative uptrend channel with a bullish 5-0 pattern formation.
While all this bullish line, trends, patterns are drawn early in the move, the predominant trends remain bearish for now, with 145-STO and institutional selling pressures per A/D, OBV and ChiOs still dwelling under their 21-EMA's.
The SP 500 SPDRs's is barely validating the bottom of a speculative uptrend channel, with a narrow positive RSI divergence and a 144-STO still in the bullish range. But, until the price escape the lower portion of the downtrend channel and continues to validate the bullish channel, then the market will likely convert bears into rising bulls, IMHO.
OVERALL - While weekly and monthly charts are prematurely signaling a bullish reversal, the terrain underneath remains soft and uncertain, and the predominant trend still favor a selling market. One indicator of such uncertainty is SPX's Bullish Percent Index (See: Chart #4 below), where all three major indices found residence in the bearish end of the spectrum, as the predominant market sentiment remains guarded, and any optimistic outlook still has to compare against the current economic realities of Europe, the US, and a failing Asian market - Hint, and off-subject: China sits on the largest real estate bubble with no internal consumptive force and tethered to it a dependent Asian market of suppliers. If we get a cold, they get the Flu.
So, if there is a bullish market out there, it's still hiding, IMHO.
Chart #1: $SPX: WEEKLY
Chart #2: $SPX - 5-Yr., Weekly Chart
Chart #3: SPY (SP 500 SPDRs) - 5-Yr., WEEKLY Chart: 15 MAY 09
Chart #4: S&P 500, INDU, COMPQ: Bullish Percent Indices (EOD) - 05 OCT 2010
All in my honest opinion.
- Dalcindo
Depending on the time frame, there is a quite a wide range of definable support for this benchmark. The good news is that the recent bearish pressure is tapering off, and the SPX's SML, MID charts are also pointing towards a tapering of the recent downtrend.
From a purely structural standpoint, there remains some room for the bear trend to reverse (See: Chart #1 below, where historical structural levels are defined)
From a harmonics standpoint, I would consider significant support to occur at the convergence of two historically significant Fib levels (See: Chart #2 below). This chart also prints a speculative uptrend channel with a bullish 5-0 pattern formation.
While all this bullish line, trends, patterns are drawn early in the move, the predominant trends remain bearish for now, with 145-STO and institutional selling pressures per A/D, OBV and ChiOs still dwelling under their 21-EMA's.
The SP 500 SPDRs's is barely validating the bottom of a speculative uptrend channel, with a narrow positive RSI divergence and a 144-STO still in the bullish range. But, until the price escape the lower portion of the downtrend channel and continues to validate the bullish channel, then the market will likely convert bears into rising bulls, IMHO.
OVERALL - While weekly and monthly charts are prematurely signaling a bullish reversal, the terrain underneath remains soft and uncertain, and the predominant trend still favor a selling market. One indicator of such uncertainty is SPX's Bullish Percent Index (See: Chart #4 below), where all three major indices found residence in the bearish end of the spectrum, as the predominant market sentiment remains guarded, and any optimistic outlook still has to compare against the current economic realities of Europe, the US, and a failing Asian market - Hint, and off-subject: China sits on the largest real estate bubble with no internal consumptive force and tethered to it a dependent Asian market of suppliers. If we get a cold, they get the Flu.
So, if there is a bullish market out there, it's still hiding, IMHO.
Chart #1: $SPX: WEEKLY
Chart #2: $SPX - 5-Yr., Weekly Chart
Chart #3: SPY (SP 500 SPDRs) - 5-Yr., WEEKLY Chart: 15 MAY 09
Chart #4: S&P 500, INDU, COMPQ: Bullish Percent Indices (EOD) - 05 OCT 2010
All in my honest opinion.
- Dalcindo
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