What does technical analysis say about the S&P 500? What would be a good level to get in?

Regards,

Sudhanshu

Dow Jones and S&P move same as NIFTY and SENSEX. Check the thread of Dow we have!

Like Nifty , S&P 500 doesn't have much history! Dow Jones you can plot from 1927 to 2008!

There is simply more downside left on Dow Jones! At least Dow will meet it's long term trendline near 5000...

http://www.e-investing.in/showthread...1738#post11738

Did the S&P 500 break above its 50 day MA upon yesterday's (30/12) close of 890 odd ? Can somebody please provide with the latest chart for the S&P 500.

The S&P 500 touched the 50 DMA yesterday.

Just above the 50 DMA (days moving average) is the 50-day EMA (exponential moving average).

50 day EMA is at 915 currently.

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man4urheart,

Thanks for your explanation in #109.

I found a P&F chart for the S&P 500.

http://tinyurl.com/Spy-P-F

Can you calculate the target for the S&P 500 using your knowledge. Thanks.

Like some one mentioned earlier, even I am curious about the 123456789-ABC that can be seen on the S&P chart.

For those who would like to know more about P&F charting, here's some info at Investopedia

http://www.investopedia.com/articles...3.asp?viewed=1

Here is the chart as demanded

If you plot chart at stockcharts , it gives you target!. I have marked same in red square boxes!

Man4urheart,

Some months ago is had started studying P&F charts. I had used StockCharts.com but since only the indexes and ADR's are covered, I didn't make much use of the,

Do you know any site that produced P&F charts for individual Indian stocks?

Regards,
Sudhanshu

As of now there is no Indian site for plotting Indian securities.

I have programmed my Amibroker for same after 2 weeks of hard work.

Already submitted the AFL on Amibroker website!. .

man4urheart/Alchemist,

Am I seeing an Inverse Head and Shoulder formation in the S&P 500 Index chart shown below ?

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p29420294102

741 low being the Inverted Head and the 1005 Nov High and 943 Jan High being the top of the shoulders.

Thanks

PS. I wonder why the HTTP link doesn't show up as a link.

- I have doubts about the pattern, the current fall is not yet extended.
- This pattern is highly unreliable! & has success rate of 35%
- I would say you should commit capital after the neckline is broken with 5% or 960 has arrived
- Volume is supporting H&S and looks like text book stuff

But I have noticed one thing from my experience that US markets are matured with professionals and they tend to make Novices like us believe in regular text book stuff and then making us take losses!

So watch out for PROS who would also be seeing this H&S and making sure your stoploss are taken out by a throw back into the pattern after right shoulder breakout!

One correction in above P&F chart

Earlier the chart scale was user defined mode, it should had been automatic traditional mode. That is why the trendline was incorrect.



The earlier triple top breakout ended at trendline!

Current rise if we cross 85 has resistance at trendline and new breakout levels for downside.

man4urheart,

Thanks for your charts !

Even I agree that I have strong doubts about the pattern - especially after I saw your PF charts.

From looking at your PF chart, it looks like 880-890 is tops for the S&P 500. I think a confirmation of this value is possible in your regular chart by connecting the 741.02 Low in Nov and 804.3 Low in Jan and extending this (downward channel) line to meet with the RED line that connects the (upward channel line) 1005 top in Nov and 943.85 top in Jan. A TRIANGLE is formed !

Since the market has been trading within the TRIANGLE channel, simply projecting the upward wave from the low of 804.30 into the second week of February, should meet with the top channel of the TRIANGLE somewhere around 880 to 900 - thus confirming with your 880-890 on your P&F chart.

What happens to the S&P 500 after it reaches 880-890 ? If there is no breakout, then obviously a move downwards to the low end of the channel ? Will the S&P hold yet again or break to retest the Nov Lows ?

man4urheart,

I just realized something else too.

Once those top channel and the bottom channel lines are drawn and the apex for the Triangle is formed in the right most corner, wouldn't it classify as a pennant ? Since the primary trend is bearish would this not be a bearish pennant ? Am I on the right track here ?

Just out of curiosity, can the price movement break to the upside from within a bearish pennant ? and vice versa ?

Thanks

Kishore

S&P 500 is at new lows now. What next ? Any ideas.

Well, if it's a bear market, it's a bear market till proved otherwise....

I can't see any support on the charts...maybe the round figures...700, 600 etc will offer some support.

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Dow has been down for 6 straight months now. So the bears (in the US) have been having it their way for the last 6 months. That leaves the door open for a huge counter trend rally. The probability of such a bear market rally may be slim, but if the US markets were to see a wash out very soon then I will be become more optimistic.

Alchemist, S&P took support at 741 in November because 737 was the 50% retracement of the 1982 bull market.
i.e.,

S&P High = 1576 (Oct 2007)
S&P Low = 102 (1982)

So a 61.8% retracement of this bull market should provide some kind of support at 665.

1576-102 = 1474.

50% of 1474 = 737.

Thus, 50% retracement of the rally would be 1576-737 = 839 on the S&P 500.

839.8 was the exact low for October 2008 sell-off.

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One thing to keep in mind regarding an historical perspective on the S&P 500 that I came across

Since 1928, whenever S&P dropped for 5 consecutive days to a yearly low and lost at least 5% during the last 5 days with the fifth day showing the smallest loss of the five.

Here's what happened next

15/12/1930 - One day from an INTERMEDIATE TERM LOW.
19/05/1931 - Eleven days away from an INTERMEDIATE TERM LOW.
12/12/1931 - 3 days before a MULTI WEEK RALLY.
22/10/1957 - BEAR MARKET LOW.
26/06/1952 - BEAR MARKET LOW.
15/08/1974 - FAILED
01/10/1974 - 3 days before a BEAR MARKET LOW.
09/08/1982 - 3 days before a BEAR MARKET LOW.
08/10/2008 - 2 days before a MULTI WEEK RALLY.
04/03/2009 - ???????????????????????????????

Are we finally seeing the light at the end of the tunnel ? or is it real doom ?

Interesting.....

Where did you get this data from..?

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I agree with Alchemist, where is this data from...

I thought Dow was the oldest index on the Block and S&P was born after 1975....

Alchemist and man4urheart,

This data was sent to me by a friend who subscribes to a paid subscription service.

man4urheart,

You are right. The S&P 500 is more recent. I think this data is an amalgamation of the past S&P 50 Index and the present S&P 500.

I found this:

History Suggests We are Close to a Low.

I edited the post by kkr555 to improve clarity.

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Just out of sheer curiosity that this information wasn't a SCAM, I checked the 1974 and 1982 data from Yahoo (shown below along with my comments). Here they are:

PS. I know the data is messy, but since we are only concerned about the Adjusted closing price, which is shown at the very end, reading the data shouldn't be all that difficult. E.g., For Oct 10, 1974, the Adjusted Close is 69.79.

01/10/1974 - 3 days before a BEAR MARKET LOW.

Date Open High Low Close Volume Adj Close*
10-Oct-74 68.30 71.48 68.30 69.79 26,360,000 69.79
9-Oct-74 64.84 68.15 63.74 67.82 18,820,000 67.82
8-Oct-74 64.95 66.07 63.95 64.84 15,460,000 64.84
7-Oct-74 62.78 65.40 62.78 64.95 15,000,000 64.95
4-Oct-74 62.28 63.23 => 60.96 <= BEAR MKT LOW 62.34 15,910,000 62.34
3-Oct-74 63.38 63.48 61.66 62.28 13,150,000 62.28
2-Oct-74 63.39 64.62 62.74 63.38 12,230,000 63.38
1-Oct-74 63.54 64.37 61.75 63.39 16,890,000 63.39 <= day 5 of decline
30-Sep-74 64.85 64.85 62.52 63.54 15,000,000 63.54 <= day 4 of decline
27-Sep-74 66.46 67.09 64.58 64.94 12,320,000 64.94 <= day 3 of decline

26-Sep-74 67.40 67.40 65.79 66.46 9,060,000 66.46 <= day 2 of decline
25-Sep-74 68.02 69.77 66.86 67.57 17,620,000 67.57 <= day 1 of decline
24-Sep-74 69.03 69.03 67.42 68.02 9,840,000 68.02
23-Sep-74 70.14 71.02 68.79 69.42 12,130,000 69.42
20-Sep-74 70.09 71.12 68.62 70.14 16,250,000 70.14

Actually Sep 23, 24 were also days of decline, but since the historical perspective is looking for a "group of 5 down days", they seem to have ignored the declines for 09/23 and 09/24.


09/08/1982 - 3 days before a BEAR MARKET LOW.

Date Open High Low Close Volume Adj Close*
20-Aug-82 109.19 113.02 109.19 113.02 95,890,000 113.02
19-Aug-82 108.53 109.86 108.34 109.16 78,270,000 109.16
18-Aug-82 109.04 111.58 108.46 108.54 132,690,000 108.54
17-Aug-82 105.40 109.04 104.09 109.04 92,860,000 109.04
16-Aug-82 103.86 105.52 103.86 104.09 55,420,000 104.09
13-Aug-82 102.42 103.85 102.40 103.85 44,720,000 103.85
12-Aug-82 102.60 103.22 102.39 => 102.42 <= BEAR MKT CLOSING LOW 50,080,000 102.42
11-Aug-82 102.83 103.01 102.48 102.60 49,040,000 102.60
10-Aug-82 103.11 103.84 102.82 102.84 52,680,000 102.84
9-Aug-82 103.69 103.69 102.20 103.08 54,560,000 103.08 <= day 5 of decline
6-Aug-82 105.16 105.16 103.67 103.71 48,660,000 103.71 <= day 4 of decline
5-Aug-82 106.10 106.10 104.76 105.16 54,700,000 105.16 <= day 3 of decline
4-Aug-82 107.83 107.83 106.11 106.14 53,440,000 106.14 <= day 2 of decline
3-Aug-82 108.98 109.43 107.81 107.83 60,480,000 107.83 <= day 1 of decline
2-Aug-82 107.71 109.09 107.11 108.98 53,460,000 108.98

We all remember Oct 10, 2008, so no need for verifying that.

Conclusion: It looks like the data is accurate.

"So a 61.8% retracement of this bull market should provide some kind of support at 665."

The S&P 500 hit a low of 666.79 on March 6. The 61.8% (665) retracement of the 1982 bull market did provide a good support to the S&P 500 "for now"

"Look's like
04/03/2009 - ???????????????????????????????"

Can now be modified to
04/03/2009 - 3 DAYS before a ????? RALLY.
I believe that the S&P 500 is still 300+ points away from making its secular bear market bottom. My guesstimate for the ultimate low is between 350 and 450, assuming that the dollar doesn't tank before this target is achieved.

"If the US markets were to see a wash out very soon then I will be become more optimistic."

I was wrong here. This time around there was no panic selling/capitulation. Instead, the selling dwindled due to sheer exhaustion. It is most likely that the sellers must have already bailed out between 720 and 820.

The likely target for S&P 500 in this rally should probably be the 805 resistance. The 805 level will produce a bounce of almost 20% from the low of 666.79

What next ? Well, I am probably going to initiate some LONG trades in the Indian market tomorrow to play for this bounce.

This historical perspective posted by me on March 5 was timely and highly profitable (at least for me - do not know if any others gave credence to this)

Along those same lines, here's another perspective.

The 1930 equity rally during the Great Depression lasted 147 days and was up a stunning 46%.

I wish I knew how to attach the chart here

The 2009 equity rally has lasted 145 days and has advanced by nearly 48%

Later, the US stock market experienced a steep drop of 85% from the April 1930 top.

The Nasdaq Composite Index is at a critical technical inflection point.

The Nasdaq Composite's Multi-Year downtrend line from the tops of

2815.67 on Oct 31, 2007 and
2522.66 on May 30, 2008

is meeting/intersecting with its significant multi-year resistance line (i.e., previous support) of

2045.20 on June 27, 2005
2037.47 on Oct 12, 2005
2037.72 on July 17, 2006.

The Nasdaq has gained almost 60% from its March lows.

I am nearly 100% in CASH. I only have E-Serve, some pledged shares of TCS and a little bit of ELSS Mutual Fund.

Thanks Kkr@

Man4 @ in this case we also seek your technical suggestion on S & P 500 as well as on nifty..

Looking at the present trend we see the uptrend only..

I am not sure it will follow the 1930 trend?

I have a question regarding break outs. I am posting this here as the break out I am going to discuss pertains to the S&P 500.

The S&P has been rallying non-stop from 1040 to 1115 now. We had a important break out from the 1105 area. This means the immediate support for the S&P would be the 1105 area. So far so good.

Now that a new support has emerged, is it possible that this support can get broken tomorrow and S&P moves down to 1080-1090 area for a brief consolidation (the 'b' wave so as to say), and then surges up towards the 1140+ area to form the right shoulder of the H&S.

In short, my question basically is whether the S&P can technically break its immediate support a day after the break out ? or this will be a non-stop rally towards the 1140+ area.

If a a stock/index reaches a an important resistance level in an over-bought position, there is a good possibility that it may consolidate/reverse from those levels.

"Reaches" doesn't mean the stock/index has to be at the exact resistance level, it can be slightly higher or lower than the resistance level.

S&P 500 is not really over-bought at this point.

In fact, it is just bouncing back from an over-sold position.

Thus, the possibility of the consolidation is more than the possibility of a strong reversal.

(The index is just below the 50 EMA on the daily charts and just below the 21 EMA on weekly charts).

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This is how the chart for S&P 500 looks now.

A Bearish engulfing pattern has been formed at 50 EMA.

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Hi sir,

With this pattern another round of selling should start or a move higher possible?

Regards.

If one is using daily charts, candlestick patterns are good only for short-term forecasting.

A bearish candlestick pattern seen on a daily chart has little medium-term or long-term implications.

(For medium-term trend forecasting, weekly candlestick charts should be used).

The bearish engulfing pattern indicates a short-term reversal and nothing more.

S&P 500 did correct sharply yesterday.

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