| The short trading week on Wall Street started in a positive note. S&P 500 index has reached 1150.45 on Tuesday, the highest level since October 2008. After losing 5.1% in the past three days, S&P 500 closed at 1091.76 on Friday. For the week, the Standard Poor's 500 Index dropped -44.27 points or -3.90%, and it is now in negative territory for the year (-23.34 points or 2.1%). The recent market rally had started on March 5, 2009 at 666.79 and reached 1150.45 on Tuesday, January 19. S&P 500 index has gained 483.66 points, or more than 73.5%. The sharp decline did not come as a surprise. The S&P 500 index technical indicators were extremely overbought and had bearish divergence on daily and weekly time frames. Usually the market top coincides with high consumer expectations. According to the Consumer Confidence Survey, the US Consumer Confidence index (CCI) posted yet another gain in December as expectations for the short-term future increased to the highest level (75.6) since December 2007. The Present Situation Index, however, continued to lose ground and remains at a 26-year low. Weekly Lane's Stochastic is still overbought. During the week, MACD line has moved below its signal line; the price has crossed below the 50 Day Moving Average and has closed on Friday below the lower Bollinger Band. All these signals usually indicate an up trend reversal and a beginning of a strong down wave. | ||
| ||
Sunday, January 24, 2010
Standard & Poor's 500 Index Trend Analysis - 1/22/2010
