| S&P 500 Trend Analysis - 10/13/2006 | ||||||||||||||||||||||||||||||||||||
| The Dow Jones was up 0.9 percent for the week ending on Friday at another record high of 11,960.51. Standard & Poor 500 Index was up 16.03 or 1.2%, while the Nasdaq Composite Index rose to 57.3 or 2.5% | ||||||||||||||||||||||||||||||||||||
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| Long-term perspective: Our perspective has not change. The S&P 500 is now near the long-term 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 short-term chart. 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 the market will rally into the end of the year. | ||||||||||||||||||||||||||||||||||||
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| Short-term perspective: The probability of the reversal rises as more technical indicators turned red. Both Dow Jones and S&P 500 have uptrend exhaustion alerts. The rank of alerts rose higher as both indices reached the trendline resistance level on several different time frames in addition to strongly overbought technical indicators. | ||||||||||||||||||||||||||||||||||||
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| Presented by www.thegreedytrader.com Research Group. | ||||||||||||||||||||||||||||||||||||
Sunday, October 15, 2006
S&P 500 Trend Analysis - 10/13/2006
