Thursday, June 3, 2010

SPX Outlook: June 03, 2010

Da Bears Da Bears ~

Looking at the Charts Left to right:

First Chart:

Assessing the moves in the coming days and weeks:

  • Today June, 03 SPX prices flirted with the 200 SMA as it firm held resistance as seen by the upper shadow.

  • I am looking for 50 RSI resistance as confirmation for coming down trend. However Momentum as seen on the MACD is making me thing prices will break through 200 SMA resistance and possibly trade to 1145- 1150 by mid July.

  • In otherwords, we will see a bullish move into Q3. Ideally I would like to see some down days keeping the RSI below 50 as a lower high is made to 1150.

    Chart 2:

  • Chart two shows that the strong uptrend formed from July 2009 has been broken. The rising wedge formation and price breaks below the lower channel along with volume confirmation show this.

  • More bearish volume in May 2010 is possibly indicating of more bearish moves to come.

    Chart 3:

  • There is a strong possibility that over a monthly period the SPX has been forming a bearish Head Should reversal.

  • confirmation on the right should is needed, and in the short term there is a strong possibility for this to happen if prices can break through the 200 SMA give it intrim strength to about 1150.

  • IF this is indeed a Head and shoulder pattern it will take about 3-4 months for the right shoulder to form: Hence bullish to mid July with a price target of 1150 and then bearish to 1050 - 1060 neckline where a break in that support will be Key for confirmation.


    Again, IF and only IF, this pattern plays out I see a price target to 1000 support and if for super bears to 900.


    Da Bulls Da Bulls ~

    This trend will only be able to become bullish if price levels manage to get above both long mid and short term SMA and break 1200 Resistances making a significantly higher high.

    A good stepping stone in bullishness would be seen if prices can reach higher than 1150+ preferably 1060 (higher than current 50 SMA) for a good few weeks.


    Putting this in the larger context of 3 year I feel that the resistance levels are more of a challenge to the Bulls than the resistances for the bears.


    Overall Summary:

    Given the amount of turmoil in the economy and markets around the world I am leaning towards the Bearish Picture more.

    Bull to 1150 (By mid July)
    Bear to 1060 (By end of August)
    Bear if Support breaks below the 1060 level to 1000


    Alexander Lê
    Managing Partner
    Analyze Capital LLC
  • 1 comment:

    1. Fantastic post. Clear, Concise, and Coordinated.


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