The State of the Trend

By: George Krum | Sat, May 21, 2011
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Last week the conclusion was that the SP500 is likely to find support in the 1320-1330 area and rebound from there. And that's exactly what happened.

Let's revisit some of the charts, and figure out why there is such a state of confusion about the future direction of the market.

The longer, weekly trend is still up, and there are no signs of trouble there.

Trends Analysis
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If anything, the pull-back that started at the beginning of May has been so far shallow by historical standards, and has not jeopardized the state of the trend yet. The added magenta line clearly shows that.

Weekly Trends Analysis
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The daily chart, however, paints a different picture. The downtrend that started at the beginning of the month has continued unabated, and we have a series of lower highs and lower lows. Is there a reason to panic? It all depends on one's timeframe and leverage, of course, but from the point of view of the rally that started in March '09, not yet.

Daily Trends Analysis
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Just like at the end of last week, the SP500 is sitting on support, in the guise of monthly pivots, and there is some added cyclicality that may come into play early next week.

Continuing with the channels, and the risk/reward oscillator, very little has changed in the last few days. The channels are extending sideways, and the risk/reward ratio remains neutral.

This week I'll conclude with the SPY chart, in order to highlight some of the added functionality on my blog.

SPY

So just like last week, the warning lights are still on, and we continue to be in a sideways phase.

 


 

George Krum

Author: George Krum

George Krum
www.citdates.blogspot.com

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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