Tuesday, August 2, 2011

Buy on Rumor--Sell on News

S&P 500
The S&P is at a critical juncture.
  • March 16th low of 1250.11 is being tested
  • June 16th low of 1258.07 has been broken
  • 30 degree geometric fan line is at 1240.38. The 45* and 36* angles provided support previously.
  • 38.2% retracement from the July 1 2010 low is at 1233
  • Seasonal Support is at 1240.23

Dow Transports

The Transports look ghastly!! However a strong case for support can be made when a diagonal trend line intersects with a horizontal trend line. I guess we will see how that turns out over the next several days. If that level fails to contain the decline all hell could break loose.

Gold is clearly over-bought but apparently on a roll. The parallel channel since the July 28 2010 low has contained both declines and advances. Gold touched the upper channel today and is trading slightly lower overseas as this is being posted. Although the RSI is diverging the ADX 14 has hooked back upwards. If the market fails here and turns down a decline back to the bottom of the channel may be in the cards.


Chartrambler said...

Thanks for the charts...are your pivot points monthly pivot points (S&P) ?

Fibocycle said...

the pivot points are calculated using the standard equation but instead of daily high low and close I use the seasonal range and close. For the summer I use March 21-June 21 range and close. Once the autumn equinox arrives I will use the June-Sept range and so on.
I also use the annual pivot calculation--although it seems to lose some credibility. I use the 'natural' calendar using the solstice and equinox.

Chartrambler said...