S&P 500 - October 6, 2010

Is TED waking up?

After a dramatic rise and fall, TED spread has risen a bit from its low levels. It is too low and too early to read much too much into it, but it’s usually on my radar and it may be worth monitoring because we live in a world ruled and governed by liquidity and not much else.


This is a weekly chart of S&P


I have added a downtrend line (orange) that connects Oct 2009 and Apr 2010 peaks. Index is just about there (it actually is a bit above it, but that may be margin of error). Notice how all my lines are coming together around the same area, which is where index has been having trouble advancing. It would be very good if bulls could find enough money and/or enough squeezable shorts to push through. If not, I would like them to stay within the blue channel.

This is a daily


I have drawn the 2007-2010 orange downtrend line here as well. It seems like yesterday price pierced through. Holding 1150 is important to maintain the breakout. Going sideways around 1150 is OK as well. A move below 1140 may mean that the breakout above 1150 has problems. 1120-1140 is like a buffer zone and I would like the index not to violate it.

What was a bit interesting today was the poor performance of NDX


NDX led S&P from the lows of August, but it’s now a few days that has been underperforming against S&P. It may be a passing phase of digestion, or not. A move below 1980 can be serious warning that all may not be well in the tech-land. A move below 1960 NDX cash may be bad news for techies and perhaps even the broader market, we’ll see how it goes.

Daily volume shrank. Daily breadth was negative.


You can clearly see that we have a breakout after a breakout.

Not much changed where broader measures of breadth is concerned.

McClellan is around neutral



NDX's McClellan needs a push into positive territory. Further weakness may bring the warning levels of 1980 and 1960 into play



This is 60-min chart


Nothing much happened today – a slight pullback, so far.

This is a 5-min chart


The whole of today looks corrective. Looks may be deceiving. Yet, if I am right, there may be some more weakness before another impulse up materializes. I am saying this within the context of the count I have on the 60-min chart. There can easily be other counts and my short term price interpretation may quickly become garbage.

So, as I keep my preferred count(s) in mind, I shall stay aware that I have some levels I would like the index to hold.

As things stand now, a move below 1148 on S&P cash may indicate a short term change in trend is happening.

These are my levels for now

1150

1145

1134

1120

OEW pivot support at 1146 and 1136. Pivot resistance at 1168 and 1176.

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

Have a Nice Day!