In the interest of presenting opposing views, here is a (day old) link to a video of Kevin Cook, a trader who thinks 1140 offers robust resistance in the SP500. The headline uses the word "bullish" but the actual interview is a bit more guarded, though Cook tends to be a bit circumspect about his guarding. He also cites the anticipated content of B. Hoover Obama's jobs speech as pulling markets up. We'll see about that. Cook's 1140 barrier is a good test case, since I think a convincing poke through 1140-1150 confirms the next leg down. There is a cluster of daily lows from 8/19 -8/22 in the 1121-1123 range, so I'll say a "convincing poke" includes a break of 1120.
FWIW, yesterday's move up had strong internals: 2658 shares up vs 316 down on the NYSE. OTOH, SP500 volume was the lowest since 8/18, which closed at (gasp) 1140!
Update: The SP500 wound up off about a precent - close to yesterdays opening, giving us two days of SIDEWAYS. (Yes - again.) This might not be a boring as it seems, though. Today's high of 1104, was reached a little after 11:00 a.m. After that, it was a slide down in a rather neat channel, which could be signalling the end of a 2+ day advance.
Here's a bigger picture look at the wave pattern, from the 5/02 high.
By this analysis, subwaves 1 and 2 (at some low level) are complete and wave three should be in progress, with today's drop from the 1204 high being the beginning, at some even lower level of trend. The 1205 and 1140 resistance/support lines are indicated. Note how the trading range is contained in the box made by the channel boundaries - another type of resistance.
My expectation is for the lower purple line and the 1140 line to be pierced on the way to new intermediate lows.
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2 comments:
"Note how the trading range is contained in the box made by the channel boundaries - another type of resistance."
I do like how the channel lines assist your analysis. I wonder things like: If you were more optimistic about the economy, would you draw and interpret those boundaries differently... or would your optimism drain away because of the channel boundary guidance?
And things like: Is the "resistance" explained? Perhaps by some aspect of human nature?
On other matters... From your sidebar: "Versifier, Parodist, Snarkmeister, Amateur Philologist. Grey-haired old man."
The wife showed me a photo from my son's wedding -- father of the bride, and some white-eyebrowed guy I did not immediately recognize.
It was me.
If you were more optimistic about the economy, would you draw and interpret those boundaries differently
I hope not. The analysis should be based on the wave form, and little else. The channels are determined by connecting the highs and connecting the lows. That shouldn't change.
You look at things like volume, internals, and moving averages to confirm or modify the interpretation.
I guess it's all about human nature. The conflict is between fear and greed, and the motive force is the herd instinct.
Sometimes I look in the mirror and see my dad. That's scary.
Cheers!
JzB
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