S&P 500 - August 18, 2010

1100 has found sellers for two days in a row. A host of EMAs go though the 1100 area give or take: 13 EMA, 21 EMA, 34 EMA, 55 EMA , 89 EMA, 144 EMA, 233 EMA, on the simple MA side, 10 MA goes through it, and all of them are contracting below the much ballyhooed 200 MA. On the other hand, 233 EMA and another widely watched MA, 50 MA, go through the 1090 area



I had not done this study when I played the range today, I just played the range because of my line studies and pivots. This evening, I decided to change some MAs and see what others might be seeing – et voila!

BTW, the whole thing looks like a H&S, does it not? I can even take the price off and give you a H&S with all the popular MA going through the right shoulder that is happening below 200 MA



Never a dull moment doing TA!

From a purely technical point of view, bulls are in a precarious situation unless they do something really bullish. Something bullish is not what bulls have been doing lately.

S&P’s McClellan group of oscillators are around neutral and, given the charts above, bulls need something bullish to get the oscillators rising and prevent them from lapsing back down


Daily breadth has been positive for two days now, but volume has been sub-par and bulls realy do not have much to show for it – not yet, anyways.


This is 60-min chart


There seems to be a short term uptrend but bulls need to start making higher highs, especially since RSI seems to be forming a divergence already.

This a 5-min chart


In the early going, index tested the top of the gap that opened on the way up yesterday and bounced. This the stuff that makes a good trading day, but, all in all, I am not impressed with what bulls have done with the oversold conditions that market registered on Wednesday.

I can’t shake the feeling that we are witnessing a broader pattern distribution. But, I have been wrong before, and may be wrong now, so, let’s just pay attention to important levels, MAs and price behavior.

Long term trend is up. Mid-term trend is up. Short term trend may have turned up (pending a higher high)

OEW pivot support at 1090 and 1058. Pivot resistance at 1107 and 1136.

Have a Nice Evening!