Monday, April 19, 2010

NOW WHAT ?!?!?!?!?!?!?

As the market entered the April 13-15th time window the S&P 500 spiked through the 4.236:1 natural resistance level (NRL) and abruptly reversed after forming a DOJI STAR. at 1213.92-1208.50-1211.67. ( near the anticipated 1215-1223 level mentioned in the April 13th post.)

This could quite possibly represent a top of major significance since the market psychology at this point has deviated from reality--P/C ratios, Consensus Numbers, media exuberance with economic performance etc. As mentioned previously the behavior of the exponential moving averages will reveal the 'path of least resistance' for the market. Currently the important emas are as follows:
  • 21 day 1181.72
  • 55 day 1153.22
  • 200 day 1086.60
Support should be supplemented at these levels due to:
  • The 2.618:1 natural support line (NSL) from the November low is near the 21 day ema
  • The 1.618:1 NSL is near the 55 day ema.

It remains a distinct possibility that the S&P 500 may continue its rally after a brief set back and attempt the 1233-1237 level which represents a harmonic price window based on the rally that commenced in March 2009. If this was to occur, the 1233 level would likely be reached in an Energy Date (ED) period. (May EDs will be posted later this week.)

Monitor the markets for tests of the ema/NSL levels and for crossovers of the exponential moving averages.

If a significant top is being formed, once a breakdown is confirmed possible downside targets will be calculated--be prepared to see some projections FAR BELOW current levels. The markets could be at the edge of an abyss.

Right click mouse for graphic options

3 comments:

Anonymous said...

I like your potential 1153 target...ARM

Fibocycle said...

1153 will likely be tested regardless of the structure of the decline. Te fashion in which the market correction unfolds will reveal whether it is merely a corrective counter-trend move--relieving bullish expressiveness-- or the onset of another encounter with the bear. If the bear has indeed been roused from her sleep expect a what will amount to a brawl on Wall Street. This bear will have unforgiving claws!!!!!!

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