Technical Note on the S&P

Quick technical note on the S&P 500. Today we are looking at price, volume, and moving averages. Below is a chart of the index since the October 4th key reversal. Note that this reversal day has the highest trading volume on the chart. We then go into a rally that culminates with a breach of the 200 day moving average on the 27th, which is the 2nd highest volume day.

Since then, the price advance is rejected sharply on Oct. 31, comes back up above the 200 day on Nov. 8 – but reaches a lower high – and is rejected a second time. The two highest volume sessions since the 27th high are the down days of Nov. 1 and Nov. 9.

Where does this leave us? To me we are at a critical juncture. Repeated failure to hold the 200 day is bearish. If we keep failing at the 200 day, reaching lower recovery highs, and seeing higher volume on down days than up days, it would turn out outlook bearish.

(click on chart to enlarge)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s