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Tuesday, October 16, 2012

Daily update 10/16

Both the short term and sub intermediate trends have been changed to neutral/bearish  This means the trends are still negative, but price is above key levels making them neutral.  This also means that it would not take much downside to be fully bearish with both trends again.  Here is the SPX daily chart.

SPX closed back above the 18 SMA today.  Notice that the 6 is below the 18 and the 18 is sloped down.  The bulls still have to prove they can keep price above the 18 long enough for it to turn back up.  Lets zoom in to the 60 minute SSO chart.

SSO spent the afternoon struggling with the resistance line.  It gapped up over the prior minor high to get the shorts covering.  It remains to be seen if we can continue up or not.  Both IBM and INTC had negative reactions to their earnings reports after the close.  If people still feel that way in the morning, the futures should be down some.  Earnings may cause some volatility over the next couple of weeks.

Despite the two day rally the charts are not bullish yet.  The market has more work to do to get into a fully bullish position.  If the market rolls over before that happens from this technical position, we will break the last swing low.


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