S&P 500 - head and shoulders pattern

The Stock Market Week - 7/10/2009

All the major US indices were negative. For the week the Dow Jones Industrial Average dropped -134.22 points or -1.62%. The Standard & Poor's 500 Index dropped -17.29 points or -1.93%, while the Nasdaq Composite dropped -40.49 points or -2.25%.

The Consumer Staples sector was the strongest sector (0.00%) last week followed by the Health Care sector (-0.43%). The Materials sector was the worst performing sector (-3.34%) of the week followed by the Energy sector (-3.23%).

The Healthcare sector is the most overvalued sector followed by Industrial Goods, while Drug Delivery, Medical Labs & Research, and Specialized Health Svcs are among the most overvalued industries. The Utilities sector is the most oversold sector followed by Consumer Goods, while Photographic Equip/Supls, Recreational Vehicles, and Business Equipment are among the most oversold industries.

Weekly S&P 500 Winners

Gains/Loses(%) Symbol Company Sector 8.49% HAR Harman Int'l Consumer Discretionary 5.45% HBAN Huntington Bancshares Financials

Weekly S&P 500 Loosers

Gains/Loses(%) Symbol Company Sector -17.74% CIT CIT GROUP INC Financials -5.00% NWSA News Corporation Consumer Discretionary -4.90% VMC Vulcan Materials Materials

Standard & Poor's 500 Index Trend Analysis

In our previous publication on June 7th we wrote:

S&P and Nasdaq have an Uptrend Exhaustion alert. This alert indicates that the uptrend is exhausted and the trend is about to reverse. ... there is still too much bullish force for the stock to decline sharply. On the other hand, it is recommended to set a tight stop.

On June 11th S&P 500 index reached 956.23 making six months high. Since then the trend turned down and S&P lost almost 10% reaching 869.32 on Wednesday July 8th. The short term trend has formed the head and shoulders pattern. The right shoulder is completed and price is near the neckline.

Standard & Poor's 500

Daily Williams' % Range indicator is oversold for all three major indices (S&P 500, Dow Jones, and Nasdaq). Daily Lane's Stochastic indicator is oversold for S&P and Nasdaq as well. 132 out of S&P 500 members have an Uptrend Support alert. If support holds and price does not breakdown the neckline, the uptrend may resume and we may see S&P above the 1000 mark pretty soon. If price breaks down the neckline, it would confirm the head and shoulders pattern. Next support level is near 825. Then price may retest the March's low level (666.78).

Presented by www.thegreedytrader.com Research Group.