S&P 500 - August 13, 2009

charts courtesy of stockcharts.com

This will be brief.

Not much changed yesterday. Retail sales came in rather poor. That caused a bit of commotion before open, but market stabilized and went up

990 is still the level to break for the bears to perhaps get a short term trend change in place. On the chart above, I have identified (using red arrows) some areas that I think are of short term technical significance.

60-minute MACD is still in a downtrend and we should keep an eye on it in case index rises past the middle of the blue channel

notice that I have laid three different counts on the chart. I think they are all equally viable. It is important that we stay objective and patient for the market to validate one and invalidate the others.

Nas100 is still in the flat box we talked about. Before market open, it registered a new high, but retail numbers kicked it off sharply. It then recovered in early hour trading and drifted on for the rest of the day.

This is a 60-minute chart of Na100 futures. Short term it can be counted in many ways. I think it is more important to focus on the flat box than the internal count at this moment. I continue to think that the box is a base and not a top, but that's just thought based on the fact that the trend is up and bears are weak, I would need more than just a thought to take action in here.

Daily volume came is below average and below yesterday on both S&P and Nas100. The broadening pattern is still active but is being put to a serious stress test by the bulls.

I continue to believe a study of junk is vital to a better understanding of market's risk appetite.


Junk bond ETF, HYG, had a nasty bar down yesterday. It was also interesting that on a day when market apparently recovered from poor retail numbers, the long treasury ETF, TLT, also did well. and that after the FED said that they were going to ease the quantitative easing.

One day does not make or break a bond market, but as the equity market chops around, setting it next move, it may be worthwhile to pay attention to other measures of risk appetite in the market. If risk is here to stay and prosper in pastures of green shoots, it should manifest itself across all markets.

Have a Nice Day!