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Monday, June 4, 2012

Daily update

There was a big divergence in the results of different indexes today.  While SPX was flat, the COMP was positive.  The transports, cyclicals and financials were down more then 1%.  A lot of different agendas today.  Lets start with the daily SPX chart.

This is the second close below the 200 SMA which a lot of people look at as confirmation of a break.  I need to see a close below yesterday's low for confirmation.  I have seen way too many patterns like this reverse back up through the MA.  We are over sold enough we could easily bounce from here.  Here is the 130 min. SPY chart.

I added another trend line a little higher up then the one I showed on Friday.  This looked so far away on Friday I decided it might not be very valid.  However, that lower trend line placed on the bar close instead of the high just does not look right in determining the end of the trend.  We will just have to see if price reacts to that lower line when touched.  When the price pattern develops further I might have to adjust the lines again.  We ended the day bouncing into the close.  Lets zoom into the 30 min. chart.

We closed just above the 18 SMA, but this is similar to the daily chart.  We did not get a close above the high of another bar to signify a break of the MA.  This is an inconclusive pattern on whether we rally tomorrow or roll over again.  This could be like the other day, in that an absence of bad news may permit a rally from an over sold condition.  Just remember we are still in a down trend.


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