Monday, 19 November 2012

Short term bottom in S&P

 Today's focus is once again the S&P index because it is showing signs of a potential short term bottom after the pull back last Friday. We had mentioned before through twitter and through a post in this blog, that as long as the index remained under 1362 area it would first visit 1345. Friday was that case. The index got rejected at that level and declined towards 1345 making a low at 1343. That was our target and it was achieved as expected. 

If you had followed our charts you would notice that S&P had broken the short term pitchfork resistance (10 minute chart above) and back tested it after reaching our 1345 area target. This means that it is possible to have seen a short term bottom.
Taking a look at the 60 minute chart we observe that the middle pitchfork is proving a strong support that needs time to be broken. Therefore it is expected for the index to slide sideways and a bit upwards in order to meet the upper pitchfork resistance. The important resistance level that could be met in an upward corrective move is 1370-73. Trend remains down although our targets from 1400 have been met.

We consider that this decline is corrective and could even visit 1300 or slightly lower levels as an extreme but possible scenario.

Thank you for taking the time to read my new post.


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