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Joined: 28 Dec 2005 Posts: 11981
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Posted: Sat Sep 08, 2007 11:17 pm Post subject: Inverse Head & Shoulders or Test of Low? |
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SPX may be developing an inverse head & shoulders pattern, which would create a V-bottom. The implication is SPX will hold roughly 1,440 and test the high at roughly 1,550 before the end of September.
However, if SPX falls significantly below 1,440, e.g. next week and before the FOMC announcement September 18th, a test of the low at 1,370 may take place, which would create a W-bottom.
Intermediate-term technical indicators, e.g. the NYMO 20 & 50 day MAs and the daily NYSI, remain in bullish uptrends, while the CBOE Put/Call MAs are market bullish. However, seasonality is bearish.
Consequently, bank and housing stocks, e.g. C and KBH, may be best at this point, while SPY and IWM may be best on a test of the low, particularly if the test is on lower volume or on a higher low.
PeakTrader top buys are: SPY IWM RKH C WB KBH TOL PFE WMT AA IP AMGN MXIM RMBS NBR SIMG CTIC and DNDN.
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