The State of the Trend

By: George Krum | Sun, Jun 24, 2012
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After correctly identifying two months in advance the downside targets for the April-June decline to within a point, OddsTrader did it again, and in the last two weekly posts nailed the target high for the subsequent 80 SPX point rally. Which brings us to our current state of the trend, which is mixed.

On the one hand, the SPX has been making higher highs and higher lows since June, but at the same time, there is a megaphone pattern in the making, and a bear flag is developing in both the daily:

Daily SPX

and weekly SPX:

Weekly SPX

Depending on the time frame, the SPX is either bumping up against the 50% Fibonacci retracement (6m) or trading above support of the 23.6% retracement level (120 w):

Source: OT Fibonacci

In a similar vein, the index is trading above the OddsTrader pivot line on the weekly chart, but closed below it on the daily. Market internals show marginal deterioration from last week, and continue giving equal weight to a move in either direction. In the presence of such mixed conditions we will get our cues from the first chart above and will let the SPX tip its hand by breaking above 1340 or below 1320.



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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