My Buddies See the S&P 500 Continuing Lower
- Posted by Greg Harmon
- on May 16th, 2012
The S&P 500 is the most watched Equity Index in the world. Everybody has an opinion on it. Two opinions that interest me suggest that there is still more downside. The first is based on the work of an older gentleman, Fibonacci, that lived in the 12th and 13th Centuries. The chart below shows that the move higher from the October low to the April high has been retraced by over 23.6%. With little in its way and a strong weekly candle thus far, a close this week under 1340 could expect a continuation lower to the 38.2% retracement at 1289. The Fan lines also suggest that the $SPX will continue lower after breaking through the first Fan. On this view 1340 on Friday’s close is the key.
Switching to more recent history using Dr. Alan Andrews Pitchfork Method as shown in the chart below shows a clear move away from the Median Line of the bullish (green) Pitchfork and it is now being attracted to the Lower Median Line. That line is sitting at 1282 at this point in time. But has also continued lower from the Upper Median Line of the bearish (red) Pitchfork. Re-enforcing the support for a move lower.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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