SPX support, resistance and moving averges are provided below. Since the bulls closed at the highs on Friday, the slightest hint of positive futures overnight tonight will create a several handle rally to start the new trading week. The market bears need to keep the SPX away from 1406 and make sure this strong resistance holds. Otherwise, 1413 will be in play. The bears need to drop under 1396 to begin a downside acceleration. A move thru 1397-1405 is sideways action for Monday. The SPX is 30 points above the critical 20-day MA which is testimony to the current bullish strength. The last three candlesticks for the last three days display two doji's and a hanging man which are agreeable to a trend change. The Paul Ryan vice presidential pick may, or may not, excite the markets. Europe and central bankers news, and earnings, will dominate the trading for Monday since there is no economic data on tap.
· 1440 (5/19/08 Intraday HOD for 2008: 1440.24)
· 1427 (5/19/08 Closing High for 2008: 1426.63)
· 1425 (Gap Fill from 2008)
· 1424
· 1422 (4/2/12 Intraday HOD for 2012: 1422.38)
· 1419 (4/2/12 Closing High for 2012: 1419.04)
· 1417
· 1415 (5/1/12 Top 1415.32)
· 1413
· 1410
· 1406 (5/29/08 HOD)
· 1405.98 Friday HOD
· 1405.87 Friday Close – Monday Starts Here
· 1403
· 1402
· 1399
· 1395.62 Friday LOD
· 1394
· 1391
· 1390.24 (10-day MA)
· 1389
· 1385
· 1378
· 1377
· 1375.22 (20-day MA)
· 1375
· 1371.07 (200 EMA on 60-Minute Chart)
· 1371(5/2/11 Intraday HOD for 2011: 1370.58)
· 1370
· 1369
· 1366
· 1364 (4/29/11 Closing High for 2011: 1363.61)
· 1363
· 1362
· 1359.74 (20-week MA)
· 1359.62 (100-day MA)
· 1358
· 1357
· 1355
· 1354.89 (150-Day MA; the Slope is a Keystone Cyclical Signal)
· 1351
· 1349.72 (50-day MA)
· 1348
· 1347
· 1345
· 1344.67 (10-month MA)
· 1344
· 1343
· 1341
· 1338
· 1337
· 1335
· 1333
KS et al, I noted that the SPX:VIX ratio is now at a whooping 95... 2nd highest reading over the past 3 yrs... The last time the spx:vix ratio was this high was in March of this year, when it even touched 100... March is when the market topped and then rolled over... So yes, there is still some room for the SPX to rise, but the upside is rather limited as again it seems the bulls hold most of the risk. Even in the past 3 years, that holds true as price usually fell within a month as soon as the 80+ level was crossed.
ReplyDeleteAnother "worry" point is the decreasing volume with increasing prices: Last week's volume approached the levels of the 7/4 holiday week... Not very inspiring IMHO. I expect volume to pick up in the next week or two as vacations are completed. In the mean time, fact remains that last weeks volume fell as prices rose and that is simply not bullish.
Finally, bullish sentiment has risen greatly last week, which is typically a warning sign for the rally.
All this can of course be nullified if the CBs decide to print and pump more money...
Bless you Arnie, great insight, and yes, intervention takes precedence. - Ande
ReplyDeleteWell said Arnie. On the low volume, however, the fun and the sun will continue for the wealthy thru August. The higher volume will return after Labor Day, so by mid September, a month from now, volume will be higher. The 8/31 Jackson Hole date is a deadline date, 15 trading days away, Bernanke has to deliver. Early September will be wild due to ECB meeting, German vote on ESM, and Fed meeting, so, say over next five weeks, the three-ring circus will expand.
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