Thursday, February 11, 2010

UPDATE: S&P Baltic Dry and Visa.

S&P 500
Although relatively simple as far as technical analysis is concerned, moving averages are a powerful tool to use when assessing markets--especially exponential moving averages which give more credence to recent market activity. The chart below shows 3 emas that accentuate 3 short term market cycles--monthly, quarterly and annual. The 200 day ema provides solid support and resistance to major impulse waves while the 21 and 55 ema tend to provide resistance and support for the short cycles. The recent low found support at the 200d ema while the 21 and 55--which were providing support has recently highlighted resistance in the S&P. The confluence of the 21 and 55 day averages suggest that the market may have completed a major bullish impulse wave. (Using the 21 and 55 day averages criss-cross is a good way to count wave patterns.) It is quite possible that the market--after testing the 200d ema may rally once again, albeit with less force or conviction, and continue to form a top into the April 3-7th time frame. A downside violation of the 200d ema would be a serious bad omen for markets!!!!!!!

Baltic Dry Index.
Shipping indicator is deteriorating--suggesting weakness in future commercial activity.A break of the recent low would be a bad sign for the economy and could suggest imminent danger for world stock markets.

VISA: Last update was January 5th @ 86.56. Visa appears to be turning up with the confluence of the 21 and 55 day exponential moving averages. A stop above the recent 86.00 high would be prudent. If stopped I will look for a short re-entry point.

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