S&P 500 (SPX) closed below the supporting trendline from the March 2003 rally for the first time. This might just be a blip, an anomaly, but technicians will look at this as an important turn of events. The bull market is 30 months old and by all measures, getting a little long in the tooth. This is the first real crack. We will see how it handles it in the coming days. In any case, weekly oscillators are not even oversold, so there is more room to go. I don't need to add that we also closed below the 200 day moving average and the 10 month moving average. It was a 15 to 3 down volume day on the NYSE and that could prove to be supportive, if it wasn't for the fact that TRIN and PC ratios hardly showed any sign of real fear given the deteriorating picture. If you want to chase this long, use tight stops. The DOW has trendline support from October 2004 at 10285. The YM short from 10708 stays open.
This entry was posted
on Wednesday, October 05, 2005 at 9:51 PM.
