S&P 500 - September 14, 2010

Hanging in there!

Market seemed ready to correct but then the tape firmed up and that was the end of that

In the morning I posted and mentioned that market had come close to my stop around 1114 but didn’t stop me, and as it rose, I did my quick computation and re-did my levels

1118, 1110, 1100, 1090-1085

This is a weekly


Nothing to dislike on the weekly. MAs are now positively aligned, and have started looking like a cradle of support. RSI has been rising and MACD has crossed. Price is still below my blue solid line, but as long as it stays above the MAs and within the dashed blue lines, it either consolidates or advances and that’s what we want.

This is a daily


A very nice chart, isn’t it? Price is above all MAs. MAs are pointing up. Shorter MAs are getting into positive alignment. RSI is making a strong print, and so on. Index is hitting the underside of the dashed blue mid-line. It's a logical place to pullback or go sideways. Markets, of course, often have little to do with logic ;-)

I would like the index to stay above the 1090 area on any pullback. I would also like it not to drop in the red zone and stay above my lower dashed blue line.

Daily volume shrank. Daily breadth was OK


There has been good improvement in the breadth measures of this chart, especially the A/D line


Percent of issues above 200 MA has been stuck around 60 for a couple of days now. Obviously that matches the index itself being barely above 200 MA for a couple of days. That is a measure bulls need to expand. I can say the same thing about the percent of issues above 50 MA. And we know that index is at August high and has been trading rather narrowly for a couple of days. So far, it looks like a consolidation, but it may change. A sideways consolidation and a burst through August high may attract a lot of undecideds

Looking close at the index on a 60-min frame


Momentum divergences so far have not made any significant dent in the price structure. That usually is a sign of strength. Also, the advance look very clean and impulsive. We might be going through a 5th wave at the moment. But the waves may extend. That makes it hard for deciding on a brand new long position. But, for existing positions, defining exit strategy may be relatively straight forward. I do it by defining multiple levels that I let trail in the direction of the trend.

OEW pivot support at 1107 and 1090. Pivot resistance at 1136 and 1040 .

Long term trend is up. Mid-term tend is up. Short term trend is up (a move below 1110 may change that)

Have a Nice Day!