We had some good price action today but the volume was severely lacking. For now I have to label this bounce as highly suspect. It seems like just a technical bounce -- indices oversold and lifting off of their 50-day moving averages -- that very few bears want to jump in front of yet. My focus will be on the pattern of lower highs and lower lows that the indices have been making over the last few weeks. I'm on the lookout for where the next lower highs might be created. The areas I'm watching on the Nasdaq are 2085 (the September 25th low) and the trendline connecting the two late September lower highs. That trendline is closing in on the nice round number of 2100. The Nasdaq's 10 and 20-day moving averages are at 2102 and 2101, so that area has plenty of potential resistance.
Today the S&P touched and stopped at its September 25th low of 1041. Note that the 1040-ish was resistance in late August so it has potential to become resistance once again. If it can get through the 1040 area, the next potential wall I see is 1050, which was a year-end target for some analysts. To add to that number's importance, the 10 and 20-day moving averages both sit at 1050 right now.
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Down | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Awesome Recap Mike, My analysis is in agreement with yours. Whether or not this is a good thing... we will see.
Also, where would you be calling support on the SPX if prices do continue lower highs and lower lows?
If the SPX breaks the prior low I'd look for a bounce at the lower trendline of the current channel.