S&P 500 - September 27, 2010

A Somewhat Boring Day!

This is a daily chart


Once again, the mid-line of the blue channel capped the day. We now have some divergence on the RSI, and it feels like S&P is having a hard time getting into the upper half of the channel. It all may change tomorrow, or overnight in the future market ;-)

Index can, of course, walk the underside of the mid-line higher. I just would like it to get and stay above it.

In the weekend post, I went through a number of conditions that might indicate a problematic situation. One condition was that if 1120 were to be the beginning of wave 1 up, then, 1120 should hold, and S&P should eventually expand breadth and momentum.

No expansion of either breadth or momentum today. In fact, we had contraction of both.

Now, What if 1120 does not hold? Well, then, we’ll be in a short term downtrend and I would like the bulls to contain it above my upper purple line.

Daily volume shrank. Daily breadth was poor


I mentioned that S&P was at the same level of January 2010 peak, and that failure to exceed that level forcefully may give the appearance of bulls falling to an Inv. H&S.

McClellan Oscillator keeps on diverging


This is a 60-min chart


No expansion of momentum here – not yet, anyways.

As I mentioned in an intraday post, a move below 1144 on S&P would threaten a change in short term trend (we have that now). A move below 1138 may potentially change the short term trend. This may become a very interesting week

I have been saying that the much maligned US currency is probably a key to the performance of the market


This is a very sick-looking chart. Not even a dead cat bounce so far – wonder how market may behave when the dead cat bounces – it may take some serious Forex market intervention, or some financial market calamity to get a rise out of this thing. Keep an eye on the Bucky!

So, back-to-back short term divergences on 60-min chart, and now a negative divergence on the daily does little to instill confidence. The weekly chart still looks good, and broader breadth measure are still OK. If the short term trend changes down, then 1120 becomes an important level for bulls to hold on any drop.

OEW pivot support at 1136 and 1107. Pivot resistance at 1146 and 1168

Long term trend is up. Mid-term trend is up. Short term trend is up (keep an eye on 1138 and 1120).

Have a Nice Evening!