In S&P and Processing Incoming Information, I set out my long-term views for the US stock market (i.e. the context to my trading). In today’s blog, I’ll update the short term picture.
Chart 1 shows the 13-w picture (quarterly trend). We see a series of price and time targets at the 10/10/08 839 low. This suggests the possibility of a bounce i.e. a directional line change. If the 13-w changes its line direction, we’ll have a possible 18-d change in trend.
Chart 1 13-w S&P
Chart 2 shows the 18-d picture (monthly trend) . If the market can clear 1044, we have a possible move to 1256 to 1193 (the break down point).
Chart 2 18-d S&P
Chart 3 is a picture of the close line chart equivalent to a 3-d swing. This shows a possible head and shoulders pattern. The 3-d H&S shows a minimum target to a possible 1082 and probable target of 1158. This does not help because it’s a long way away from the Chart 2 target.
Chart 3 3-d S&P
Finally the seasonal pattern starts with a low early next week for a rally in the first fortnight in December.
The alternative will be a move down to retest the lows at 839. If this occurs we’ll need to watch the average volume per bar. Average or above average volume as the market drops will suggest a breach of 839 and a move to the 12-M 2002 low at 768. Below average volume per bar will suggest a successful retest and an upmove to follow.
Refer this blog post to a friend or colleague…
