http://stockmarketchartanalyst.blogspot.com/
Today the $SPX daily chart broke below the old support level of 1050.47 from June 7th on a closing basis, with a close today of 1047.22 That means there are NO more support levels all the way down to the 1020. level set back in early July.
Which way the market moves will depend on three important economic reports due out tomorrow. Two of them come out an hour before the opening bell, with the second read of 2nd Quarter Gross Domestic Product (GDP) followed by the bi-monthly read on Consumer Sentiment. Both of these reports are important, and are potential market movers, but Fed Chairman Bernanke speaking on the economic outlook at the Kansas City Fed's annual Jackson Hole conference a half hour after the opening bell is even more important.
All ears will be tuned into his comments, especially after his statement about the economy a while back where he characterized it as "unusually uncertain". That led up to his weak attempt at QE2, which the market reacted very badly to. Does the Fed have any more tricks up it's sleeve to help bolster the failing recovery? It appears to me the Fed is out of bullets, and is shooting blanks these days.
If the market does not like what he has to say tomorrow, we'll see 1020. on the $SPX in the very near future, even though it is totally oversold and the RSI is very close to 30 where buyers normally step in for a quick oversold rally. Tomorrow should be an interesting end to the week.
Happy Trading!...
zigzagman/chartaholic
Tom
(The comment for the MACD in red should have as a last word "but it's a lagging indicator"...)
My Fidelity Active Trader Pro daily chart for the $SPX shows that it has closed below the 5MA for six sessions in a row. The three money indicators at the top look very weak. Chaikin Money Flow (CMF) has dropped below the zero line for the first time in a month and a half, On Balance Volume (OBV), and the Accumulation/Distribution (A/D) line are all downticking sharply. Both the green and red DI lines of the ADX are neutral since they are both downticking, and so is the RSI which isn't showing any noticeable divergences. The ADX itself (black line) is upticking, showing that the downtrend is strengthening.
Overall, this chart looks very Bearish at this point, but as usual, it's all about tomorrow's economic reports and what Helicopter Ben has to say from Jackson Hole, WY. starting at 10am Eastern time...
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