Chart of the Week: SPX Chart — support

The S&P 500, even with the recent more aggressive selling, has not scored any structural breakdowns in trend. This suggests the recent "distributive wave" is more a correction of near-term over-exuberance than anything deeper.

Chart Watch – S&P 500 weekly chart with trend lines

Spx_2005_support

click for larger chart

chart courtesy of Redwood Technimentals

This
does not mean we can’t correct more after a modest bounce — but as of now, there is no evidence to support the notion that this
is the start of
a much larger correction — at least not yet.


Even with the recent pullback and moderating internals, neither support levels (red & green line – 1,175 and 1,160 levels respectively) nor the uptrend (black line) on the S&P 500 have yet to be violated.


.

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  1. david bennett commented on Jan 7

    According to my browser you seem to have linked 4 of your referances to the Asian times.

    I’ve commented on a couple of these subjects recently. Though it’s deep down in the my first comment and more developed in others I argue that gift cards aren’t necesarily evil. Already competition is forcing some concerns to associate them with discounts. I argue that they could evolve into store managed “savings accounts” linked to retailer created money, stores already isue credit, so this can start creating new “currencies.”

    http://www.seekingalpha.com/2005/01/activelymanaged.html#comments

    Although I didn’t see the article you linked to here’s another and my response to the notion that MS is about to eat it.

    http://www.internetstockblog.com/2005/01/technology_revi.html

    – David Bennett

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