Monday, August 2, 2010

Last Gasp?

The S&P broke through the previous high of the July rally of 1120.95, closing at 1125.86 which is closing in on the June 21st high of 1131.23. A 50% retracement of the April-June decline is at 1115.36 and a 61.8% retracement is 1140.00. Extending the five pivot points from the 1010.91 low projects two targets that have the highest frequency Fibonacci clusters. They are 1130-1135 and 1150-1155--with the highest frequency being the 1150-1155 cluster. This would suggest that the most likely target for the current advance would be 1150 to 1155. There are two Energy Date periods over the next several days that could coincide with this price target being reached. August 3-5th and August 8-10--with the latter being of greater potential energy.

Bottom Line: It appears that the S&P could continue to rally into the 1150-1155 area coincident with one of the coming Energy Dates with the August 8-10th period being the more likely scenario, but traders should be on the alert for the market to possibly peak at the lower target of 1130-1135 in the August 3-5th Energy Date window.

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