Tuesday, September 28, 2010

S&P & Gold Update

S&P 500 Cash
Although Friday's shenanigans were mildly entertaining--if you were there for the first half hour of trading--it is apparent that the 1141 area is still exerting its influence on the S&P. I still believe that the 1141 area continues to be as significant as the 1107 level for reasons already explained. The SPX has retraced 66% (2/3) of the April-July bear campaign while prices have resonated around the 1141 harmonic level during the latest Energy Date. While a run at 1175 is possible the market is quickly becoming exhausted even though incredible amounts of the public's savings are being invested in dividend ETFs. I cannot help but wonder if the markets do what I suspect they may over the next few years, in retrospect, dividend ETFs may be a reflection of the mutual fund fiasco of the 1970s.
  • RSI is showing signs of divergence
  • ADX suggests that even though the amplitude of the recent rally has been impressive, it is not considered to be a strongly trending market.
  • MACD is in a position to rollover
  • Thursday's low of 1122.79 could become pivotal over the next several days. A trade or especially a close below this level would suggest more downside to come.
  • A close below 1107 would be a strong indication that prices may accelerate to the downside and test the 1074 level then 1040 and then 1010. The speed at which this potential decline unfolds will present evidence of its nature. A sharp decline with volume violating the 1074 level will knock the wind out of the Bull.
  • Monitoring Volatility is the key. A sharp rise in VIX--especially above 28--will portend a serious decline is commencing.
  • A break above the recent high would likely set up a test of the 1175 level on Wednesday or Thursday Sept 30-31. This would set up the October 5-8th as a potential significant window of time.

GOLD (December Comex)
  • December Gold is showing signs of exhaustion with the ADX above the +DI and -DI
  • 1299.49 is 360 degrees up from the 1159.30 low of July 28th
  • Sun-Pluto cycle became active over the weekend.
  • Prices made a 1.272 extension of the June-July decline.
  • If the intermediate trend is to remain bullish prices should remain above 1237.90. Closes below this level would suggest a decline of a more serious nature.
  • On a short term basis, the Sept 21st low of 1272 should provide support but at the same time this level will attract prices in the event of a decline.
  • As with the S&P, the October 5-8th period looks to be significant


Anonymous said...

I guess we're aiming for that 1175, new high by like a few ticks this afternoon

Joge said...

Dow JOnes is closing in on the 11258 (4/26/10) high yet sp500 is struggling to get to 1173. is that good sign or a red flag for the market?

Fibocycle said...

I take this as a bearish indication. The fact that the broader market is under performing the Dow 30 suggests that the internal strength of the market is not as strong as the Dow makes it out to be. The RSI is getting into the overbought area while the MACD is indicating a loss of momentum in the market. I think that a run at the 1175 SPX is likely although the 1141 influence is still quite powerful.
I am showing the following dates for potential changes of trend: Sept 29-30 and October 5-8. The October Date is quite powerful.