It was the first negative week for the S&P 500 (^GSPC). During the week, the ^GSPC dropped -11.38 points, or -1.01%, and closed at 1115.10 on Thursday, December 31, 2009. It was the worst weekly loss since October 30, 2009. Weekly volume was -53% below average. Read More ...
A short-term uptrend had started on November 27, 2009 at 1083.74 and reached 1130.38 on December 29, 2009. ^GSPC gained -46.64 points, or -4.30%, in 32 days. The chart has formed a Broadening Descending Wedge chart pattern. The trend support level is at 1089.92 and resistance is at 1130.43. A Broadening Descending Wedge pattern is considered to be a reversal formation. It usually appears in a mature trend, characterized by overbought/oversold long-term and short-term indicators, and often generates divergence on long-term indicators.
Daily Lane's Stochastic is overbought while Williams' Percentage Range is strongly overbought. During the last week, daily Lane's Stochastic main line (%K) has declined below the oversold signal line (%D). Such crossover is considered a bearish signal. Daily MACD has bearish divergence.
The daily MACD line is above its signal line since December 22, 2009. This is an indication that the short-term trend is up. The distance between MACD and the signal line is low and getting smaller. It indicates that the current short-term uptrend is getting weak.
A Parabolic SAR (stop and reversal) indicator (1115.1) comes close to the price (1115.10). It indicates that the trend is getting weaker. A Parabolic SAR is used as a trailing stop loss for long or short positions. It works best during strong trending periods.
The price is close to the moving average in the center of the Bollinger Bands. The distance between the Bollinger Bands is falling and it was 3.9% on Friday. It is 39.71% lower then two years average. It indicates the period of low volatility of the stock price. The Bollinger Bands are often used with a non-oscillator indicator like chart patterns or a trendline. The signals are considered more reliable if these indicators confirm the recommendation of the Bollinger Bands.
