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Joined: 28 Dec 2005 Posts: 11979
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Posted: Sat Nov 18, 2006 9:30 am Post subject: SPX: Maintaining the Upward Channel |
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The daily chart below shows SPX continued to trade within the parallel upward channel and has successfully tested the lower uptrend line at least four times. Eventually, SPX will close below the lower uptrend line, which may accelerate selling and end the intermediate-term uptrend.
The NYMO 50-day MA, below the price chart, peaked at roughly 25 in September. Typically, when the NYMO 50-day MA rises above 20, it'll fall below negative 20. However, SPX often falls sharply over the second half of the NYMO 50-day MA downtrend. The NYSI 50-day MA, also below price chart, is beginning to flatten, which may indicate SPX is near a top.
The MACD, above the price chart, created a bullish crossover last week, while VIX remains below the 21-day MA, which are both bullish. However, VIX closed slightly above 10 indicating extreme complacency, which is often bearish. Also, SPX closed over 100 points above its 200-day MA, which may indicate at least a short-term pullback.
It's uncertain how much longer SPX will trade within the uptrend channel. However, the holiday shopping season begins next week, which may be the catalyst to determine market direction over the next month or two. Given the lower line of the uptrend line has held for months, it has become an important level.
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