Mike's Macro Analysis

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Ominous Technicals for S&P 500
Wed, Nov 4 2009, 11:50 GMT
by Mike Paulenoff
MPTrader.com
Friday's action could have been one of the more destructive technical sessions in recent memory. Not only did the day's weakness totally reverse Thursday's upside reversal gains, it closed on the low for the day and for the week. Furthermore, let's notice that on the enclosed weekly chart that this week's close broke and sustained beneath 1) the Aug-Oct support line; 2) the 10-week (or 50-day) MA; and 3) the major up trendline that originated off of the March 2009 low at 666.79. Finally, let's notice the very negative juxtaposition of the weekly slow stochastics and the weekly RSI.
The composite picture that we are left with this evening is ominous for the SPX, and should result in a relatively nasty correction that is similar, but more intense than the 88-point decline during the June-July period. Even so, if such a decline emerges and equals the 10% June-July decline, the SPX will press to 990 next. However, if the magnitude of the correction is commensurate with the much more dramatic tops in the oscillators, I will be expecting a decline to 960-930 before the dust settles.

Published on
Wed, Nov 4 2009, 11:55 GMT
Archive
- Gold at New Highs, Dollar Continues Slump
Published On Tue, Nov 17 2009, 06:01 GMT
- Familiar Feel to S&P 500 Strength
Published On Mon, Nov 9 2009, 09:57 GMT
- Ominous Technicals for S&P 500
Published On Wed, Nov 4 2009, 11:50 GMT
- Pressure on Gold
Published On Mon, Oct 12 2009, 07:33 GMT
- S&P 500 Vulnerable to Downside Test of Lower Bollinger Band
Published On Mon, Sep 28 2009, 08:21 GMT
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