On August 10 I wrote:
‘Based on the chart of the S&P 500 index, which ended yesterday at 1453.09, it looks as if a drop below about 1430 would mean a more prolonged decline for the U.S. stock market unless there’s an immediate bounce-back. A drop to the 1430 area on high volume with a strong rebound on the same day could, in fact, be a good sign for those who want the market to go up. But a real break below about 1430 would likely precede a significant further drop.’
The S&P 500 is at 1389 as I write this. It paused for about a day at the 1430 level without enthusiasm, then broke sharply down. I would say that 1453 to 1385 (earlier this morning) constitutes a significant decline.
Any technical analyst can see that there are several indications of technical support around 1380, which means that the decline will probably slow or stop in that area at least temporarily. The next likely place for a pause or a rebound is close to 1300.
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3 comments:
Nice analysis. I'm not a techie when it comes to markets, but find no reason to disagree. On the non-tech side, there has been a fairly large bail-out of markets already, and they couldn't hold it.
The sharp recovery in the last hour of trading today was, almost certainly, the Fed in effect intervening and saying it will cut interest rates. This is enough to make brokers and bankers say, "Then why didn't you say so in the first place, m-f-er?. We good."
On another note, something you might be interested in:
http://www.atlargely.com/2007/08/whats-the-matte.html
Thanks, Marc. Any time you feel like commenting on the markets, please do.
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