PartTimeTrader Market Analysis S&P500 for November 4th, 2010

So now, the action today obviously begs the question, What Next? The next Resistance is 1230 to 1240. If we can remain strong we could get up to 1300. One could make a case that 1236 to 1260 range will be difficult to break through, due to a Double Bottom type Resistance pattern dating from year 2006. It’s important to keep in mind when contemplating these numbers, that this current “stimulus” is getting us into more trouble, and if anything like the past few stimuli, will not help as much as the ultimate harm. Therefore, I’m not real optimistic regarding these upward Targets. Having said that, my pessimism in the past was unfounded as far as Price was concerned because, as we all know, common sense has never been the stock market’s forte. The Day of Reckoning will come soon enough for the house of cards we find ourselves in.

What we have to watch for now is a Reaction Pullback from what could easily be a Double Top here at significant Resistance, and a Classic play would be a Retest of the 1170/5 area, which is where Price met so much trouble in May at the 50 Day Moving Average. After this solid 2-month long Uptrend, which one could argue was a bit of, “Buy the Rumour” into the Election, a Pullback would not be anything for Bulls to be too concerned about. Indeed, prudence would dictate a bit of profit-taking here.

Having said that, a continence of Today’s Breakout to our first Targets would not be unprecedented, but traders are soon going to be crying ‘Over-Bought,’ and will want to keep their fingers intact, if only to buy in again at Support.

It appears we are going to make it through the scary October unscathed, which opens up to the “best 6 months of the year,” according to Stock Trader’s Almanac. This is a strategy they have been using since 1950, and by all appearances we are set up to see a replay this year. With one caveat: the November mid-turn election. It would seem Republicans will sweep the election, and this may explain why the Markets seem to be be pleased. I’m Independent, so, I’m just saying…

PartTimeTrader Market Analysis S&P500 for October 25, 2010

The important thing today is that we dropped below our Support line, which in mid May found Resistance at our 50 Day Moving Average. If we drop again tomorrow, the first Target will be the Uptrend line which will junction with the 1150 area. That would be a reasonable Bounce point of a Pullback, and the spot everyone will be watching closely.

PartTimeTrader Market Analysis for October 19, 2010

If we cannot hold that Uptrend line [sigh] then we are back to watching for support at the summer Double Top, and then further down to our 200 Day Moving Average and 50 Day Moving Average. Remember that I have been saying for a while that the 50SMA must cross above the 200 before we can get serious about any Uptrend, let alone a Bull Market. We have risen near enough that the Market is getting very concerned about what to do next. That crossover we speak of would send a load message, and could possibly instigate a move many are not prepared for. That’s why today’s move isn’t a real big surprise. If not today, it would have happened soon, even if at a slightly higher level.

And don’t forget, this is October, one of the very scariest months of the year, and not just for children.

Be careful out there…

Having done so, Price promptly pulled back again during the afternoon.

This market is doing pretty nicely for the witching season of October. If we don’t fall from here, the next obvious Target is 1220. But we ran into some significant Resistance right here, so it should be interesting to how any rise would behave.

This 1173 – 1185 area is very important now, and it would appear a rise would have to push hard. Anything could happen. It’s a cuckoo month and elections are ahead, which may bring significant changes. Pffft. Yeah, right. As the Who once sang, “Meet the new boss; same as the old boss.”

PartTimeTrader Market Analysis for October 13, 2010

Interestingly, even though drawing that Uptrend line appeared to be a mistake at the time, once we rose above the 50 SMA again, it has been a solid base of Support ever since.

For over a month now we have been talking about our 1173/4 Target, which is that May High that dumped at the 5o SMA Resistance. Well, as of Friday we are only about 5 points away. We are so near it’s what I call a Tempting Target. The only thing that will keep us away at this point is Fear. Having said that, why didn’t we just go for it on Friday? Why the Pullback for the day before rising to such an obviously important Magnet? There would seem to be a bit of trepidation already. We have seen this phenomenon before, of course, so if that pattern holds true again this time, we could see another Pullback to our Uptrend line or even the Double Top again. I would like to think we hit our 1173 Target at the Open Monday, but we will just have to see.

PartTimeTrader Market Analysis for October 8, 2010

If we can Breakout this week above 1774, that will be the new Support as we attempt a run for the 1220 are. First things first, though.

PartTimeTrader Market Analysis for October 5, 2010

The question of the hour is: Will the Market get spooked about being so near an important Resistance level? It certain seems within the realm of possibility considering how indecisive things have been over the last 2 weeks. And we ARE in the dreaded month of October. [shudder]

We could, of course, be whistling through the graveyard and Breakout above Resistance to higher than our 1173. If so, my first suspicion would be a Fake Break to draw in the suckers. Are there any of those left anymore? I believe most are out of the Markets and in no hurry to get back in. Fake-outs may not be as prevalent as Fear, which is probably a lot more likely. My guess is any show of strength will be quickly sold.

If we can make it that far at all.

Another Test of the Double Top Support (at the top of our Fibonacci sequence) would junction with our little Uptrend line if this happens on Monday. That would be a double support Bounce which could give us the impetus needed to get us going again toward our 1173 Target.

Right now there is no indication we are inclined to drop by any significant amount, so I will continue to wait patiently for our 1173 Target.

Having said that, it will be interesting to see what affect all this Terror Talk over the weekend will have on Monday’s open. This evening’s Futures could give us a clue. If they do take a hit they may be able to work it all out before morning. Regardless of how the media has been pounding us with the subject, there seems to be little real concern by the parties that would actually be affected by an attack.

Earnings reports this week, so buckle up. Surprises could easily get us out of the doldrums.

PartTimeTrader Market Analysis S&P 500 for September 23, 2010

For tomorrow, we will be watching to see if Price continues down to the little Uptrend line or 200SMA. Hitting either of those would be no big surprise, but we are especially interested in what happens after that. We really do want to hold the 200 this week. But recall that I have mentioned in the past that this last uptrend area is part of a “mushy” place and we may see Price bouncing up and down in here for a while. Thus far that’s what’s been happening, but this latest little Breakout has been encouraging. If we can move up again past the High of this week, the next Target is 1173 ish.

I drew a horizontal line from the High of early this year, which is where this Uptrend has halted yesterday and today. If we continue upwards the next Target will be 1173/4, where the May High meets the 50 Day Moving Average, and drew back.

PartTimeTrader Market Analysis S&P 500 for September 21, 2010

Obviously, we are not out of the woods yet, and there are compelling reasons now to Pullback for a Test of the Double Top, which is now Support. Failing that, the 200 Day Moving Average had better hold if there is to be any confidence in this move at all.