S&P 500 analysis for Jan 19-22

What an interesting week it was for the stock market. Here we look at the S&P 500 for the shortened trading week of January 19-22. But first, it was an interesting past week, and shows us a lot about what to expect going forward.

First off, some non-technical notes: Wednesday was interesting; a MASSIVE order of more than a quarter million went through in the S&P minis! That is a notional value of about $12,961,800,00.00!

There are rumors that the market is being kept higher by the Fed...that they may in fact be the mystery buyer of this market. I don't know if that is the case, but either way this market was marched higher in after hours trading during the last few months of 2009 and now intra-day we are seeing aggressive buying come into the market at key technical levels to keep this market in a technical uptrend.

No matter what the reason, price is what matters and here are the levels to watch for the upcoming week as shown on the chart. Key support comes in between 1132-1130 which held off aggressive selling on Friday. A break of that level does damage to the uptrend. Some support comes in at 1128 with further support coming in at 1123.50 and 1116-1114.80. The target for the breakout below 1130 is 1110.

The rising trend line which was broken on Friday (see chart) will act as resistance on the move back higher - on Tuesday this will be between 1140 and 1142 but will increase over time. A push back above that line indicates a move towards the upper trend channel with resistance along the way at 1144, 1148 and then recent highs at 1150. With “nothing but air” on the upside, resistance beyond comes in just below 1154, followed by 1160 and 1168. After this little resistance remains until 1180.

The average weekly true range stands at just about 30 points. Keep in mind it is also a shortened week for stocks due to a holiday on Monday.

CFD trading analysis written by Cory Mitchell, CMT, Vantage Point Trading, for CFDsPros. For information on stocks and real time stock quotes see CFDsPros.

S&P Analysis for Upcoming Week: Jan 11-15

The year started out strong for US stocks, breaking out above the range that had pervaded much of the last two months of the 2009. The S&P also finished at a recent high, closing out strongly on Friday. Volume was not great and throughout the week there were numerous examples of times when the market barely seemed to be open - the futures and many stocks stuck in small ranges with no activity whatsoever. None the less, the bull rally has continued.

Thanks to Friday's quiet afternoon and aggressive close, initial support for this market comes in just above this range at 1141.60 which is also Thursday's close. Further support for the week comes in at 1139, 1136 and 1131-1129.50. A series of lows is collected in this final area. Due to last Monday's aggressive buying off the open, there is little support below this area for some distance, although some support may come in just below 1128. Further support comes in at 1123.50 and 1116-1114.50.

The weekly average (14) range for the S&P is 31.8 points. Volatility has been dropping off significantly and pretty steadily since early Nov (and over the longer term as well). With volume lower, volatility down and much of the gains over the last 5 months coming from gap opens instead of intraday movement, the market seems rather complacent. So far, in the first week of the year, the market tended to open low but then rally into the close for a positive gain. Whether this dynamic continues into this week is yet to be seen.

Resistance has clearly been broken on the upside, and very little stands in the way of further moves higher. The target for the range breakout was 1146 and 1149. The S&P closed at just about 1145. Profit targets are not reversal points, the market could easily keep going, none the less these points can be significant and we are very close to them. With "nothing but air" on the upside, resistance beyond comes in just below 1154, followed by 1160 and 1168. After this little resistance remains until 1180. Intraday action throughout the week will provide additional resistance and profit target levels. Once again keep in mind the average weekly range for this market currently is 31.8 points (both up and down) so a move to these extreme levels is not highly probable with volatility dropping.

The attached chart shows current trendlines and some major levels worth noting.

Cheers,

CFD trading analysis written by Cory Mitchell, CMT, Vantage Point Trading, for CFDsPros

S&P Outlook Going into 2010 - Jan 4-8

In the final week of the year we saw the market continue to break to new (recent) highs above the former range highs, but volume was very light. Thursday, the final trading day of 2009 for stocks, saw aggressive selling into the close with the S&P falling 7 points in the final 25 minutes of trading after another very sedate afternoon. The S&P closed back within the old range.

On the hourly charts we see something interesting. Despite finishing within the old range which has been with us since mid November, we do see a possible uptrend emerging; we failed to reach the range lows but made higher highs. Short-term trend line support comes in at 1104. Respect, and a bounce off that level and a move back towards the recent highs indicates this market is likely to experience a legitimate upside breakout and the reemergence of a bull rally in early 2010.

On the other hand, a move below 1104 and then 1094 indicates a retest of the range lows between 1086-1084. Penetration of that level indicates the breakout higher was false and that this market is highly likely to head lower in early 2010.

Starting in 2010 I expect volume to increase. If this market is to move into a renewed bull rally, volume will need to increase. If volume stays light or even decreases (!?) this market will stay range bound and decreasing volume is likely to sink it towards the range lows mentioned above.

Written by Cory Mitchell, CMT for CFDsPros

S&P and Dow: Weekly Stock Market Analysis (Dec 21-Dec 24)

S&P and Dow: Weekly Stock Market Analysis (Dec 21-Dec 24)

Overall, it was a fairly uneventful week in terms of price action in the stock markets. We had a lot of nice tradable moves during the week, but ultimately the market did not move into or out of any technical significant areas. Volume was light, except for Friday which was due to index rebalancing and contract expirations. In terms of the overall movement throughout the week, the S&P traded in a smaller range than average, only moving about 21 points all week; the weekly (14) average is just under 36 points and heading into this week was slightly higher.

Technically, the stock market (S&P and Dow Jones) are still range bound and that range is very much intact. The S&P closed on Friday right around 1102.

Near term support is at 1094-1093 but movement below this level does indicate a high probability of retesting range lows. Support near the lower range is 1086 and 1084. A drop below 1080 (using a buffer below the lows) would punch us out of the range we were in. The target for that breakout is 1055 which is just below a hourly trending support line (going back to Sept). There is important interim support which will provide us with other signals if the breakout downward does occur. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action, given our average weekly range, to reach 1055 if in fact this market does break lower.

If we look at a daily chart, we see that the level we are at right now is right on a downward sloping trendline extending back from late 2007. Really, the current range gives us our trading signals, as a breakout of the current range will also cause a break of the old trendline, a break lower out of the range will show that trendline has held. But no matter which way the market breaks, old trendlines often have an impact on future price movements (see my article in the December issue of Stock & Commodities magazine), so it is worthwhile keeping on the charts.

On the upside we have resistance at 1104 which was respected during the afternoon sessions of Thursday and Friday. Beyond this we have the Thursday open near 1106 followed by 1108 which will also act are resistance. Beyond this is no significant resistance until 1116, although there is some minor levels at 1113-1114. The resistance area near the highs is 1116-1120. Moves have been fast and sharp up in this area, and it deserves respect. If this range is broken out of, targets are 1123, 1128 and 1131.

The Dow Jones Industrials is another index can be looked at. That market has been analyzed by my friend Adam Hewison. He uses a few different tools to gauge this market, and also gives a slightly longer term view for those that are interested in looking beyond the next several sessions and are concerned about what may happen in the New Year. So in that light, you can view the Dow Analysis video As the Dow Goes, So Goes the Country here:http://broadcast.ino.com/education/dow1217/?campaignid=3\%22+target%3D


With the holiday season I may not have an analysis posted next weekend. So please pay attention to the range on the chart. Have a wonderful and safe holiday season, and profitable trading in the meantime. For those of you who view my EUR/USD analysis each night, well, I will see you soon, since we still got several sessions before Christmas.

Cheers and Happy Trading!


CFDs trading analysis by Cory Mitchell, CMT for CFDsPros

S&P Analysis for the Upcoming Week: Dec 14-18

The S&P 500 which is a good representation of the overall stock market, is still very much range bound, and is likely to remain so until the new year. A very quiet Friday with little volume did little to inspire confidence to the contrary.

1100 is the nearest main support level for the upcoming week, with a move below it indicating a test of 1098-1097 with the lower portion of the gap created Friday. Support beyond is 1095-1094 but movement to this level does indicate a high probability of retesting range lows. Support near the lower range is 1086 and 1084. A drop below 1080 (using a buffer below the lows) would punch us out of the range we were in. The target for that breakout is 1055 which is just above a hourly trending support line (going back to Sept). There is important interim support which will provide us with other signals during the week. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action to reach 1055 if in fact this market does break lower. This is because the average weekly range for the S&P is just over 37 points, and the market closed on Friday right around 1106.

On the upside resistance is at 1109-1111. A move above this area represents the likely scenario that range highs will be tested. The resistance area near the highs is 1116-1120. If this range is broken out of, targets are 1123, 1128 and 1131.


Written by Cory Mitchell, CMT for CFDsPros

Stock Market Analysis Nov. 30 – Dec. 4

The following is the stock market outlook, using the S&P 500, for the week of Nov 30, 2009 – Dec 4. This analysis can be used to help in day trading or swing trading decisions, as well as for investors to gain technical insight into the current market.

Events like which occurred on Wednesday, with Dubai World saying it would not be able to pay it’s debt, are the type of events which will be the catalyst for this market going lower.

Technically this market rally is on shaky ground at these levels. We have divergence on multiple time frames, not to mention inter-market divergence (markets moving contrary to the general relationship). Divergence can last for a long time and is a not a trading signal in itself, but when news such as that of Dubai World is released, hardly ever does it come alone. There are still many systemic problems, and no matter how much money is thrown at a problem, traders and investors still get scared.

Right now the trend is still up, and should be traded as such, but be cautious. Support is Friday’s low at 1084. A drop below that would punch us out of the range we were in. The target for that breakout is 1055 which is just above a hourly trending support line. There is important interim support which will provide us with other signals during the week. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action to reach 1055 if in fact this market does break lower.

The average weekly range for the S&P is just under 37 points, and the market closed on Friday right around 1091.

If the upcoming week brings rainbows and butterflies, here are the levels to watch on the upside: To move higher the first resistance point is a short term level at 1100. We also have resistance at 1105 followed by1108 and 1110. Beyond this are recent highs in the market, right around 1114. A break above that indicates another upswing. Volume should be rising if this occurs, but so far this market rise has not occurred on large volume, so look for volume to at least remain steady. A decline in volume on a breakout is likely to result in a failed signal.

Targets beyond 1114 are 1118, 1123, 1128 and 1131.

Trade with the trend, but don’t become attached to it.

Cory Mitchell, CMT

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