The State of the Trend

By: George Krum | Sat, Jun 2, 2012
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Last week we observed that the SPX is building a bear flag, that market internals are overbought, and that traders should keep a close eye on the 1290 level.

The gap up on Tuesday, after the usual and compulsory "encouraging" week-end news from Europe, proved to be the perfect fade and the SPX lost 54 points on a daily closing basis.

As one could expect after such a drubbing, the indices are ready for a dead-cat bounce. The focus should remain on the 1290-1295 zone for signs that the current downswing is complete:

The weekly SPX retracement chart suggests that support is in the vicinity of 1265-1275, which coincides with the 38.2% retracement level of the July '10 rally. (Source: OT Fibonacci)



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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