Monday, August 31, 2009

June Repeat?

SPX ended last week down a huge -2.05. This isn't representative of the large swings SPX had during the week. The tri-star pattern did not reveal did not give us a 4th day confirmation candle. This is why it is important with candlesticks patterns to wait for a confirmation day.

The price action the past couple of days was very similar to the price action in late June.
Look at the daily chart of SPX notice in June when SPX chopped around the 200EMA, eventually falling to the May lows. The price action last week was very similar, there was a lot of spikes to new highs but bears were able to control the upper levels. SPX in June ended in many dojis, we had very similar patterns last week.
The weekly chart shows the pattern much better. The doji last week was also followed by very low volume. Volume has been weak since early August.

KEY LEVELS:
The key levels to watch on SPX are 1016, on the daily chart this is a short-term trendline(greenline) and 1016 is the 200MA on the monthly chart. This level held last week and provided a strong bouncing point. If SPX can hold above 1036 it would be a victory for the bulls. Futures look to be opening up around 1020 so this level could provide a bounce at the open.
The June topping action started a multi-week decline, will it be the same this time?