S&P 500 - August 10, 2010

So what exactly did the FED say?

Will they print the life blood of the capital markets? If so, will they print enough of it to get the bulls giddy and carefree?

We'll know soon enough

This is a weekly



Not much happening.

MACD may be close to a cross – we all know MACD lags the price, right? Still, on larger frames, it can help validate an ongoing move.

MAs are positive and look like good technical support.

Index is above my blue line, and I said that I would regard that as positive posture.

This daily


Index has been sluggish below the purple line. Bulls need to show something bullish in here and quit pussyfooting – maybe they don’t have money, or maybe they are on vacation? Anyhow, if they can ram it trough, index may target 1140-1150. There seems to be ample technical support from MAs, but that may entail some 30-40-point drop which nowadays can happen in just a few hours.

This is 60-min


The gap of the morning got filled after the FED show.

The lower pink line has been good support but is getting hit a bit too often, and swings are getting smaller. Is it distribution or healthy churning and consolidation? Can’t say for sure.

Daily breadth was poor all day. Daily volume expanded on the way down


Notice how we have higher red volume bars – that is not fun!

ARMS registered yet another high day, this is getting a bit suspicious – not fun! Is it distribution or healthy churning and consolidation? Can’t say for sure, but I have become suspicious of the bulls in here.

So, some sold at higher levels and dragged some shorts in, and then hit the tape and squeeze the shorts after the Fed show and we get a hard bounce that fills the morning gap but cannot go higher for the day. Quite convenient for those who started selling overnight.

The bounce after the Fed show was not enough to help McClellan


Nor was it good enough to change daily breadth – I just cannot trust the bulls that much at this moment – they need to show me something bullish – it’s just that simple!

This is a chart of S&P’s McClellan’s group of oscillators


Of course, index can rise on aggregate for days despite declining oscillators as it did in February, but money was being printed round the clock leading into as well as during February.

Diverging and declining oscillators are, IMO, a very serious warning sign that things may suddenly go wrong. Summation is positive and faster oscillators are neutral. Bulls can easily turn this around – they just need to bid the tape, and for that they need money. Let’s see how bulls interpret and react to Fed-Speak over coming hours and days

Long term trend is up. Mid-term trend is up. Short term trend is up.

OEW pivot support at 1107 and 1090. Pivot resistance at 1136 and 1146.

Have a Nice Evening!