SP 500 weekend update 08 30 2009
The SP’s seem to be stalling out on lackluster momentum and indecision at the contract highs.
After putting in new contract highs of 1,038 on 08/25 and then re-testing them again on 08/28, the market it finding a difficult time of attracting new buyers.
As you can see from our daily chart below, we have 5 doji candles in a row coupled with diverging Price / Momentum as well as weakness in both the DI+ and DI-. Basically we have no zero confirmation that these highs want to hold.
The market resistance came in at 1,000 but as we know momentum does not stop on a dime and we are witnessing the after effects of that initial drive to 1,000
As the weakness continues I would be looking for a retest on light volume of 1032, as a good spot for a swing short.
We can also see that we are dramatically extended from the 200 Day MA, and a pull back to that level would retrace almost the entire summer rally. More likely however, would be a test of the last pivot low at 981 to attract dip buyers
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Greg
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Category: Market Commentary
