The State of the Trend

By: George Krum | Sat, Nov 17, 2012
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The Sp500 continued stair-stepping down from one support level to the next and reached our chart target of 1346 by the end of the week. Market breadth bottomed-out on November 13th and showed a positive divergence on the 14th. As expected, that helped stem the decline but it didn't achieve much more than that. In fact, the index finished the week 15 points lower than it closed on Wednesday:

The fact that the index closed lower despite improving market breadth shows how weak and vulnerable this market is. At the current rate, market breadths should peak in three days after which the sideways/down phase should continue.

The critical support level to watch on the downside is 1346. A drop below will open the door for a retest of 1330 and 1313. The first resistance level comes in at 1362 which coincides with our daily pivot point:

We'll conclude with a monthly chart update as a reminder that the SPX has entered a period when extreme caution is advised:



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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