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Sunday, December 6, 2009

Week-end Outlook!!

The Summation Index has been running pretty much flat for the last month with a small amount of support, but coming upon some trendline resistance in the next couple of weeks
The McClellan Oscillator also has been running flat for the last month, staying right in the middle of neutral territory, not giving any buy nor sell signals.
While the percent of stocks above their 50 day moving average keeps making lower highs, diverging from the SPX as less and less stocks are contributing to the new highs, a sure sign of weakness.
And this divergence can also be seen in the S&P Bullish Percent Index.
The Russell is starting the show some bullish signs, now above the 20 and 50 day MA, and the 20 MA is very close to crossing back over the 50 MA. Also the RSI has broke above trendline resistance, with the MACD most likely to follow suit.
The SPX, now down into oversold territory, but with divergences still happening on the MACD and the RSI is showing that the most likely course over the next week is more of the same. It has also been stuck in the same trading range for the last month and a half, but now has room to move to the upside before hitting trendline resistance.
Upside targets are in the 1120-1140 range to keep respecting the trendlines of resistance, and the next trendline support is down in the 1085-1090 range.
Overall my best guess will be the SPX making new short-term highs in the next couple of weeks, before starting a new correction. The short-term EW counts are really skewed and back to confusing again, so I will rely more on the longer term counts and the indicators for the short-term. Now would be a good time to be in cash as this sorts itself out. There does not seem that there is much reward available to be long, compared to the risk of a sudden sell-off.

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1 comment:

  1. Hi Michael Eckert,
    2 cents
    My last update SPX500
    Enjoy and Cheers!!
    Possible bullish flat but I still don`t believe target around 1200,
    but I`ll stay alert with this pattern.
    I believe that the top will be made between false breakput numbers,
    Today test 1119.33 one of the numbers of false breakout and
    close again below 1113.69.
    Suport 1085, 1090 and 1072 short-term.
    Resistance 1113.69, 1119.33, 1127.80, 1137.
    Bears need to break 1090 and 1084.90 to alert reversal trend last months,
    confirmation with close daily below 1072.