Monday, June 13, 2011

A Few Charts

S&P 500
The serious nature of the decline since May 2 is highlighted by the fact that the decline is both the longest in time and greatest in amplitude since the July 2010 low. This over-balance is not a good long term development for the market.
Due to the oversold condition of the market and the fact that some sentiment indicators are getting into the extreme bearish level, a low around the June 15-18th could start a rally that could take the market to the June 28-July 3rd Energy Date.

TSX (Toronto)
Last week the market dipped below the 200 day exponential moving average and the horizontal support levels. Although short term indicators are suggesting a possible low--like the S&P 500--the market structure is deteriorating significantly.

US Dollar Index
Price action and volume are suggesting that an intermediate cycle low is in place for the USDX and a significant rally could unfold over the coming months. A break above the indicated breakout level--especially if accompanied with high volume--could be the beginning of a powerful move to the upside. The Euro could decline violently and significantly.

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