From our 2/17/09 daily market commentary:
The market got off to a hot start in February as the S&P 500 gained 5.2% during the first week of the month. Unfortunately, those gains dissolved last week as the S&P gave back 4.8%. Where to next?
The wedge pattern remains intact and as the index gets closer the the apex and the trading range tightens, it should be getting ready to uncoiling one way or the other. The break through the lower end of the wedge last Wednesday was short-lived as the market rallied bringing the S&P 500 right back into the wedge. Whether that action was a prelude of things to come, or a "false breakout" that will lead to a move higher, remains to be seen, but as I write this Monday evening, the futures are down just over one percent and if that holds into the open (Tuesday), it would put the index back below the rising support line of the wedge again.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The MACD still looks promising, but again in this oscillating market, it may not be relevant. The more relevant indicator is the stochastics (STO), which is heading down but not yet oversold.
The overbought/oversold indicator remains relatively neutral and it too is forming a wedge pattern. I assume it will break in the same direction as the market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
More
The market got off to a hot start in February as the S&P 500 gained 5.2% during the first week of the month. Unfortunately, those gains dissolved last week as the S&P gave back 4.8%. Where to next?
The wedge pattern remains intact and as the index gets closer the the apex and the trading range tightens, it should be getting ready to uncoiling one way or the other. The break through the lower end of the wedge last Wednesday was short-lived as the market rallied bringing the S&P 500 right back into the wedge. Whether that action was a prelude of things to come, or a "false breakout" that will lead to a move higher, remains to be seen, but as I write this Monday evening, the futures are down just over one percent and if that holds into the open (Tuesday), it would put the index back below the rising support line of the wedge again.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The MACD still looks promising, but again in this oscillating market, it may not be relevant. The more relevant indicator is the stochastics (STO), which is heading down but not yet oversold.
The overbought/oversold indicator remains relatively neutral and it too is forming a wedge pattern. I assume it will break in the same direction as the market.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
More
