Monthly Archives: January 2009

The 805 support level was tested six times before the bulls finally took control. Yesterday we saw the long-awaited breakout over the 850-860 range on the S&P 500, and today it proved to be another false breakout. A move over 850-860 that sticks for a few days should mark the beginning of a bigger move to at least 905-915. The December advance stopped at 915, and both the January 2008 and September 2008 rallies were stopped at their respective 60-day moving averages. Today’s 60-day moving average is 905. If 905 and 915 can be taken out, the 1015 to 1065...

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Tuesday’s Inauguration Day meltdown in the S&P 500 looked like the end of the road for the bullish-consolidation-around-850 case, with the only chance of redemption being a strong rally on Wednesday right out of the box. And, of course, that’s exactly what we got. So Tuesday and Wednesday turned out to be just two more consolidation days in this volatile process. Today’s dip tested both Tuesday’s low and yesterday’s high, and while that does not support an immediately bullish case, it also is not enough to take the rally possibility off the table. I expect this consolidation to continue for...

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Last Friday’s sharp S&P 500 rally to 934 set a new top for the short-term outlook, and the subsequent consolidation around that level followed by yesterday’s quick test back down to 905 was just as expected. We should see a sharp jump from the 905 energy level, with a close over 934 marking the next leg up to 1065 or so. This is all part of a larger pattern that can still get us to new highs this spring, although that has become a stretch goal. Wherever this rally tops out, I still expect the following move to be a...

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