Thursday, June 20, 2013

SPX Weekly Chart

The blue dots show the moving average ribbon with price above the 20-week MA above the 50 MA above the 200. Each time this set up results in a reversion to the mean. The August 2011 waterfall crash was the most drastic correction where price tagged the 20 MA, 50 MA and 200 MA overshooting to the downside to end up in the cellar at 1080 in October 2011. The April-May 2012 sell off sent price through the 20 MA and the 50 MA served as support. The September-October 2012 sell off sent price to the 20 and 50, same dealio. This sell off sends price to the 20 MA so far and that is where the story has yet to be written.

The ominous aspect of this chart is the weak and bleak indicators (red lines) desiring lower prices after any near-term bounce would occur. So it looks like a date with the 50 MA is on the table. There will likely be fits and starts although the prior sell offs lost altitude fairly quickly, each sell off occurring over a one to three month period. The current selling is five weeks old now within this window so there may be much more fireworks beyond the fourth of July. The test of the 20-week MA at 1582.17 is important. The low today was within a couple points. Well, do you think this sell off is the run-of-the-mill drop to the 50 MA and party time again, or, is it time to pay the piper to the 200 MA? This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.