The State of the Trend

By: George Krum | Sat, Jun 2, 2012
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Last week we observed that the SPX is building a bear flag, that market internals are overbought, and that traders should keep a close eye on the 1290 level.

The gap up on Tuesday, after the usual and compulsory "encouraging" week-end news from Europe, proved to be the perfect fade and the SPX lost 54 points on a daily closing basis.

As one could expect after such a drubbing, the indices are ready for a dead-cat bounce. The focus should remain on the 1290-1295 zone for signs that the current downswing is complete:

The weekly SPX retracement chart suggests that support is in the vicinity of 1265-1275, which coincides with the 38.2% retracement level of the July '10 rally. (Source: OT Fibonacci)

 


 

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 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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