Wednesday, June 3, 2009
A Major Bearish or Bullish Possibility
Carrying on with the larger view monthly chart theme here. Two things to notice in the chart. First notice the EMA 10 at 949 and its relation to price (SPX may turn here at 949). While the EMA 10 has been violated in the past it was very rare. Second notice the SMA 50/100 crosses just above the bottom in 2003 and the lows today.
For those of you that have been pointing to similarities between the last bottom or the bottom in '38, here is a bullish scenario. If price crosses the EMA 10 I would say by looking at past historical trends that the odds of this being a V shaped bottom are pretty good. Now don't go all wiggy on me and think I've turned into some sort of perma bull, I have not.
Price is currently being rejected by the EMA 10 and this may just prove to be the top of P2 or very near it as Dan and Kenny have begun mentioning in their posts. 954 resistance and the 200sma (at 1010) sit right above for more resistance (this may be the 200ma the market is looking for - not the daily 200ma). IMO this will make the push to 988 a little more difficult that Dan and K may be thinking, but we'll see. They are the pros and I, well I am only a pretender on their stage. Price has (rarely) violated the EMA 10 and returned to the trend while tails thru it occur often. This is something I will be looking at closely. Those manipulating bastards may just pull it off.
UPDATE: There is a cry baby out there that wants his props. He says he is not getting credit due for "his" findings, and I guess he is half right. Since I am (rarely) not one to steal without giving credit due, I will point out that the negative divergence needed idea on the MACD Hist was an idea I first saw on Stocktock and one of his posts. Guess I should have said in the post that the bull theory does not need the neg div and he bear theory will have one. On the 200ma idea, no soup for you. Sorry Schweitzer, you sissy. LOL of course.