Tuesday, June 01, 2010

Stock market update 01 June 2010



I am currently on holiday in Thailand but thought I would provide a very quick update. Apologies for any typos, format errors or the brevity of this update.


SPX weekly from Jan, 2009:



Price broke the uptrend line 4 weeks ago and has entered a correction phase. Whether this is the end of the bull market or a "reset" before the next up leg is impossible to determine at this time.

The blue line @ 1066.19 is the weekly closing low price back in early Feb. Until price closes below the the last weekly closing low, this market is in a sideways consolidation phase. A weekly close below this level would be my signal to reduce my equity exposure. Until then, the rest is noise.

I have put a Fibonacci retracement on the chart. If we were to close below the blue line my next target price would be either 1009 or 944. We could go to these levels and still be in a bull market.



SPX 3 year weekly:



The 3 year view with volumetric shows the following:

-the 13 week exponential moving average (EMA) has not crossed the 34 week EMA

-price has not broken below the strong volumetric support near 1050 level.

Until either of these occur, I continue to view this as a correction within an ongoing bull market.


Bottom Line:

Holding my positions until either a weekly close below 1066 or a daily close below 1044. Until then there is not enough technical evidence the picture has change

If either of these is violated on a closing basis I will be forced to reduce my exposure as it could be the start of a nasty new bear market.

As of today, there is not enough information to tell me either way which direction the markets want to take. When they show me, that is when I make a move. Until then I continue to patiently watch and wait.

dwaynemalone1@gmail.com



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