S&P 500 - June 24, 2010

Another ugly day, another ugly candle!

Sometimes we get our timings right and either switch sides, or sidestep before a market turn. On June 22, S&P seemed like it had a hard time getting past 55 EMA. I posted intraday and said that I had set some levels: 1110, 1100, 1090

S&P has managed to break through all three.

Today it dropped into the neighborhood of 1070 that has been another reliable marker for quite a while.

This is a weekly chart


Remember that I said this week’s candle looked ugly? Now it looks even uglier. Week’s not over and things may change dramatically tomorrow, but, so far, that is one truly ugly candle.

Still, the weekly chart is not broken, not yet anyways. That being said, I do not like it when index has difficulty getting above MAs. Nor do I like it when a level like 1070 gets tested multiple times in a short span of time.

Remember I mentioned RSI turning half way and said that it was “not a typical sign of a raging bull”? That was a good clue that there was something fishy about upside momentum.

There is not much to say about the weekly frame that I have not already said many times. It is not broken, but it is being stretched to its limits.

This is a daily chart


I have a dashed purple line that, in conjunction with 55 EMA, gave me a heads up about the possibility of a turn on June 22. I have a solid purple line that the index cut below, rose to retest, and failed to take around 1090. Good line studies so far. Now, I have added two red parallel lines. I would require the bulls to hold the lower red line, preferably above the blue dashed line, and then get above both the solid purple and the upper red line, and then stay above the solid purple line. If they can’t do as required, they are as good as dead meat to me.

Daily volume expanded. Daily breadth was bad


Index is below the famed 200 MA – again. This does not look good folks, things are rolling over and unless there is some massive amount of money urgently hitting the tape on the bid side, things will roll over.

McClellan Oscillators are back in negative territory.



The Summation Index looks like it is rolling over.

This is a 60-min chart


There are some divergence on massively oversold RSI. If the bull is dead, oversold and positive divergences mean little. If the bull is just sick but alive, a first step will be to get back above 1090. After that, I have my requirements around daily line studies mentioned above.

OEW pivot support is at 1058 and 1041. Pivot resistance at 1090 and 1107.

Long term trend is up. Mid-term trend is down. Short term trend may have turned down

Have a Nice Evening!