S&P 500 - June 8, 2010

1940 Tested!

In the previous post, when S&P was at 1068, I said I would widen my range to 1040-1100. Well, 1040 was tested today.

This is a weekly chart


Desperately hanging to support.

S&P is not in a good shape. Bulls have lost control and index is just hanging on tooth and nail. Weekly is oversold and bounces may appear like today from support, but, from a technical point of view, there is a lot of overhead resistance to overcome. 1070 is immediate resistance, and, after that, 89EMA is around 1090 which was the level bulls had to hold and could not.

This is a daily chart

That congested blue box is not typically very bull-friendly. It usually is a pause in the direction of the trend. It theoretically projects to 1020 as a first target and 940 as a second target if it resolves downward. Theory does not mean certainty and we never know for sure beforehand but that’s where probabilities lie. As long as bulls are not above the box, they get no benefit of my doubt – None, Nada, Rien, Hich Biri, Nicht – you get the idea.

If I wanted to be kinder to the bulls, I would say that I would pay them some attention if they could recapture 1090. For now, they have bounced from what we identified as support at the outer edge of a range. But this is not enough, a lot more is needed from them.

The daily chart is a broken chart. It takes a lot of money to correct it back upright. Just keep an eye on moving averages and important levels.

Overall breadth picture is not very good


For the day we had expanding volume and positive breadth, but, now, the extreme short term oversold levels of breadth are relieved


On Friday, TRIN registered a massive peak. What could the bulls do with that? Nothing really.

This market behaves like it is broken.

This is a 60-min chart


Don’t get caught in the minutiae of the small waves. Pay attention to how price behaves around MAs and important levels. For now, 1070 is a first step, but, really, below 1090, bulls have nothing.

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 is down.

Have a Nice Evening!