The top wasn't quite in place with yesterdays test of 1,070.98, but it should be very soon (most likely in the 1,075-1,077 area). A break below 1,067 will be first indication the top is in place, while a break below 1,058.24 will confirm the top for a fast decline to at least 1,040, but it should be much deeper longer term.Friday, July 9, 2010
S&P 500 - The top should be in place very soon
The top wasn't quite in place with yesterdays test of 1,070.98, but it should be very soon (most likely in the 1,075-1,077 area). A break below 1,067 will be first indication the top is in place, while a break below 1,058.24 will confirm the top for a fast decline to at least 1,040, but it should be much deeper longer term.
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Why are you so confident that the top will be in place soon?
ReplyDeleteHi JW
ReplyDeleteI see the rally from 1,011.52 as clearly corrective and if that's true then we shouldn't be able to break much above the 61,8% retracement target of the decline from 1,131.23 to 1,011.52, which comes in at 1,085.50. The second reason is the on my indicatores the rally from 1,011.52 looks very very tried. That doesn't mean that it can't fight its way up to 1,085.50 area, but it shouldn't be able to do much more than that.
Further on you have the 55 week exponential moving avg. coming in at 1.084.65 this week. All of this adds up to me as to the top being in very soon. I must admit that I had expected 1.077 to be able to hold, but as we wasn't able to break below 1,069 on friday the possiblity of a move to 1,085.50 is clearly there. However if we reach 1,085.50 or if we break below 1,069 I would sell my self short with a stop 1% above 1,085.50 if we get to 1,085.50 and just a few points above the top if we don't get to 1,085.50 a break directly below 1,069.
It makes sense, thanks
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