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The above chart is of the daily cash S&P 500. After spending virtually the entire day trading higher it ran out of steam after making a new high by a very small amount with an hour and a half left in the session. The last half hour particularly saw the steam come out. That being said, there were a few intriguing points that we wanted to point out.
There has been a 70 point decline off the October 21 high of 1101.36 to 1029.38. The .500 Fibonacci retracement comes to 1065.37. Today’s high was 106100. The .618 Fib retracement is 1073.86.
The 50 day moving average was at 105335 according to the display on our chart. Even though the S&P traded back above that level today it was unable to close above it. There are now 4 consecutive daily closes below the 50 day moving average and five out of the last six sessions have ended beneath it.
The trend line that marks the entire upward move from the March 2009 lows has now seen five of the last six sessions close below it. Today’s rally high came to within approximately five points of the trend line which likely poses some significant resistance as a return to trend line.
Finally, one of our clients versed in candlestickese pointed out to us that today’s daily bar is a falling star and that as one would imagine, a bearish not bullish event.
Good trading to all
Jeff
CB&S
Division of MF Global Inc.
Futures and options trading contain substantial risk of loss and may not be suitable for all investors.
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