|Minyanville Staff March 6, 2009, 2:15 pm|
Monday, March 9
sexta-feira, 6 de março de 2009
In the last Quick Market Note, we highlighted the inverted cup-and-handle formation on the S&P 500 with a stochastic divergence. We noted the potential for a measured move upon breaking the neckline that could send the index toward the 664 area.
As we approach that level, we wanted to take a moment to review the current technical landscape. In our opinion, the short-term sentiment is overly negative, and is setting up the potential for a slight bounce in this area upon completing the aforementioned measured move.
Where could that bounce take us if it were to play out? See the 60-minute chart below. We have a short-term downtrend as outlined, which is the first area the markets need to get through. From there, we have a few gaps following the recent carnage. And of course, the neckline near -800 should offer formidable resistance (should we even get there).
To be clear, in the big picture we remain extremely cautious, as there's a great deal of technical damage that will take a long, long time to repair as we work off extreme speculative and credit-driven excess.
As we also discussed, breaking the 770 level on the S&P violated the 2002 market lows (akin to a trap door), equating potentially to only the second secular bear market in history. This has also sent the markets into what we have termed “the abyss.” ... Read entire article
domingo, 1 de março de 2009
March 1, 2009- Market Summary
Wide-spreading economic concerns continued to plague the stock market as investors sent the S&P 500and Dow Jones Industiral Average to new 12- and 11-year lows respectively. Friday's release of a 6.2% drop in fourth quarter GDP is the sharpest decline since 1982, which caught many economists by surprise. The sharp drop in GDP is a clear indication of the issues facing the economy and many traders are now trying to determine if the various bailout packagaes will be the catalyst needed to reverse the strong downtrend. As you can see on the charts of the major indexes, the S&P and the Dow closed the week below their respective November lows, which will be used by proponents of Dow theory to suggest that this is the start of another wave lower. For further reading, see Dow Theory.
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