Tuesday, 25 September 2012

Has S&P topped?

In several previous posts I suggested that bulls should be very cautious with their positions. Premium service members were alerted to cover long positions on time. The market was unable to overcome 1467 and naturally retested the 1452-50 support. The index could still have a little lower levels to go, but all in all our view is that this downward move is still corrective. This corrective wave could end near or at the 61.8% retracement. My view is that it is going to end between 1435-1426. If 1426 is broken then this would be an sign of further weakness. Strength on the other hand will be signalled if the market breaks the red dotted downward sloping trend line that we back tested today. 1397 level is very important as far as the medium and longer term trend, but at this point I think the chances of that level being broken are very slim. 

QE3 enthusiasm is finally settling down and investors who bought due to the announcement are now selling with anxiety. The market as always has discounted the announcement. 

Thank you for taking the time to read my thoughts.

No comments:

Post a Comment