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[RT] sp 500



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this is a reprint with permision
The S&P 500 is again testing support at 1220 after a sharp fall on Tuesday [2] broke below the trendline, signaling a slowing of momentum. The index has consolidated for the last three days in a narrow range at the support level. Weak closes and lower volume on Friday [5] favor a downside breakout; confirmation would be a close below Thursday's low. A downside breakout would signal a test of secondary support at 1190 and possibly primary support at 1140.

A close above 1240, on the other hand, would signal resumption of the up-trend, with a target of 1280: 1250 + (1250 - 1220).



The big picture is acquiring a bearish hue. The primary trend is up and displays unusually high (weekly) volumes, but Twiggs Money Flow (21-day) crossed below the zero line after a bearish divergence, signaling distribution. The index has also failed to break out of the bearish rising wedge pattern and may now test its lower border. Low 63-day volatility warns of a strong move ahead but gives no indication of the direction.
Primary support is at 1140; resistance at 1260, the upper border of the wedge pattern.


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