The State of the Trend

By: George Krum | Sat, Jun 30, 2012
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Two weeks ago we identified the 1313 as an important SPX level above which bulls remain in control. That level was successfully tested three times this week and the SPX added another 50 points to the upside.

By doing this, the SPX also completed a rebound from the lower to the upper Hurst Channel:

Chart courtesy of OddsTrader.

The last leg of the rally helped propel the SPX just above the 38.2% Fibonacci resistance level at 1360:

Source: OT Fibonacci

It should come as no surprise that market internals have rebounded and have reached short-term overbought levels:

In summary, the SPX accomplished an impressive rebound this week and is currently bumping against solid Hurst Channel and traditional TA resistance levels. Market internals are overbought and the daily risk reward ratio has increased to more than 2:1 in bears' favor. This suggests that a new period of consolidation/retracement is likely upon us. A further breakout from current levels should stall at 1380, while a breakdown below 1360 will encounter support at 1340.



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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