The red lines show a weak and bleak profile that want to see another lower low. The pink lines show an H&S pattern now in play, so a lower low would test the neckline at 1355-ish. SPX 1354 is sturdy horizontal support from the last couple years, so if price ruptures the pink neck line at 1354-1356, the SPX will be in big trouble with a target at the horizontal support at 1340-1344. The bears are in perfect shape to push the indexes over the hill. Watch the indications mentioned to see if the market bulls are able to push back tomorrow. 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 financial decision.
good DD! I think this was it for the SPX for now. If it will go down till 1260 I dunno, personally I think the low 1300s, possibly 1280. Why? Becauset the bears have about a week before the ECB launches it's second LTRO after Febr 29. And we've seen what the first round has done, ever since LTRO-1 was announced: steady march up with an r2 of almost 1... scary actually. Also 1320-1280ish should be mid-BB level (20-dSMA) which often is solid support in an uptrend like this.
ReplyDeleteInteresting that the SPX 200-day MA is 1257 and change. More reason to target the 1260 area? And if Greece is declared in default in a few weeks (Fitch is the latest voice to support that) then 1260 may be just a blur on the way down. It's frustrating to hear analysts continue to recommend individual stocks. Are they known for being poor at handling macro issues? Is it their job to simply sell stocks?
ReplyDeleteHello Arnie, yep, first thing is first, however, and the indexes have to begin selling off before any downside targets can be established. Utilities and copper are key, utes appear willing to roll over but copper remains elevated keeping the indexes buoyant.
ReplyDeleteLTRO is mucho importante for next week but it is not simply the announcement itself targeted for Wednesday, 2/29/12, but more importantly the amount. Lots of numbers are thrown about and some folks use euro's, some dollars, so the range remains sketchy but sounds like a target of 500 billion to one trillion is targeted. Thus, the high end allows the booze to flow and the bulls to run, but, an LTRO, even though it will definitely supply bull fuel, that is at the low end, will dissapoint markets. Perhaps that is on tap?
Hello Weaver, the 200-day is important and especially watch the slope of the 200 for any ticker traded. If the 200-day MA is sloping downwards it is very bearish for a stock. The SPX is trying to meander sideways. There is lots of bullish momo in the broad markets so they will have to turn first. As soon as Keybot would flip short that would signal that the market downside is in progress.
Analysts and any pundits on television have the agenda of attracting money to their funds, that provides more capital so they can make the returns that support their high commissions and fees. Thus, they will always talk optimistically no matter what since someone is more likely to write a check to the optimistic guy instead of Gloomy Gus. Their analysis of markets is worthless since they are cheerleaders.
Likewise, the television. Business programs survive off the commercial time they sell, that is how they make their money. Viewers, since most have 401k's, IRA's and other such investments, want to see markets go up, that makes them happy, down markets make them sad and mad. For professional traders, there is no sentiment for up or down or for a company's success, or failure, all that matters is that the trade direction is correct.
This is why the television commentators are always cheerleaders for markets and on the optimistic side; they need to continually attract companies to buy their commercial time, this is how their bread is buttered, they have to be cheerleaders all the time to make everyone happy. This is why the majority of news from the business channels must be viewed highly skeptically. Of course most of the pit traders and nuts and bolts traders that appear on tv will tell you the straight skinny, as well as good ole boys such as Art Cashin or Rick Santelli.