Wednesday, September 17, 2008

Where next for the S&P?

Since the short to intermediate term picture is so mixed; oversold in the short, yet strangely overbought in the intermediate, I decided to take a step back and look at the monthly chart.

There is evidence the S&P is shaping some form of cup-and-handle pattern, or at least a handle which will evolve sideways if not higher. For this to be true there are three watch areas. The first, 1,264, was blown away this week. The next, 1,177, is the scene of the current fight with the index getting close to this low yesterday. The third is 1,090 which will be the last chance saloon for the pattern.


As I prefer to use the candlestick real bodies to define my anchor points, those who use all price points would have the three watch areas at: 1,273 (Busted), 1,179 (current test), and 1,084 (Next). Obviously slightly different to the above values but in combination can be considered support bands.




Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website
 
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