The State of the Trend

By: George Krum | Sat, May 26, 2012
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Last week we suggested three good reasons why the market is due for a bounce. The 1289-1290 support zone held, and the SPX gained 22 points. In the process it even managed to close above the daily pivot line at 1317:

Source: Oddstrader

The outlook going forward, however, isn't that rosy. The SP500 remains trapped between the daily 50% and 38.2% retracement levels:

Source: OT Fibonacci

And market internals have become overbought again, placing an immediate further advance in doubt:

So far it looks like the SPX is building yet another bear flag, but the confirmation will come only with a break below the 50% retracement level at 1290.5. A jump over the 38.2% retracement at 1321.5 will open the door for a retest of the 1340 resistance level.

Source: OT Fibonacci.



George Krum

Author: George Krum

George Krum

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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