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 available from iTunes:

OddsTrader - uses the power of Hurst Channels to produce price and time targets, and combines them with proper risk and position size management.

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 - is the first mobile app that gives users access to one of the most profitable and time tested hedge fund trading strategies.

OT Pivots - combines the power of Pivot lines with cycles and automatic signal generation.

Gann 9 - is 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).

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