Saturday, August 04, 2007

$SPX Monthly Analysis for 08.04.2007

Monthly chart shows a double top, where there were sellers, with selling noted the last 3 months (June,July and current month of August). IF this is the top, THEN look for a retrace of the last move up from the low in October 2002. Minimum retracement level takes us to the .382 fib level of 1255.64ish. The monthly chart current is more bearish now, and we could be in for a deeper retracement. Confirmation of new wave will be the break of the UTL. Early signs are there that this is could be an important top, but we won't know for sure until the UTL is broken, giving us confirmation. Caution is key now.

The weekly chart shows more clearly the impulsive nature of the move down from the high set the week of July 20, 2007. The breaking of the key UTL (uptrend line) indicates overbalancing and the start of a new wave. Currently, price has found short term support in late Friday trading at the .618 fib area. This past week's price action shows a close below the 34ema and support right at the 50sma.

The Daily chart shows the relentless selling taking price below all key moving averages, including the 200sma. Will this capitulation wash out all the sellers? Will there be buyers showing up the next trading day? On a short term basis, there may be early buyers, but the selling does not look done yet based on the longer term timeframe charts.

No comments: