| S&P 500 Trend Analysis - 10/06/2006 | ||
| It was a positive week for the major US indices. The Dow gained 1.5% while the S&P 500 index rose 1.0%, and the Nasdaq Composite was up 1.8%. | ||
| Long-term perspective: We are going to discuss the S&P 500 index chart today as it can give us more clues for the future direction. The chart below presents the S&P 500 index long-term channel that began in January 2003. The S&P 500 is now near the channel resistance line. There are two possible scenarios that we would like to consider. 1. The S&P 500 index turns from the channel resistance line and moves down until it reaches the channel support line. 2. The S&P 500 turns from the channel resistance line and moves down for a few weeks to reset overbought technical indicators, and then the index rally again to retest channel resistance. In this scenario S&P may form a rising wedge along the channel resistance line. You can see the similar pattern (highlighted in red) on S&P yearly chart. | ||
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| Short-term perspective: In both scenarios suggested above the index should turn down near the long-term channel resistance line. If scenario #2 is correct, S&P 500 index is going to move down for two or three weeks to the level around 1318 and then he market will rally into the end of the year. | ||
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| Presented by www.thegreedytrader.com Research Group. | ||
Sunday, October 08, 2006
S&P 500 Trend Analysis - 10/06/2006
