Heading to a 4 Way Stop in the S&P 500 Index

• Posted by Greg Harmon
• on July 6th, 2011

There are always bulls and bears in the market and so this one is no different than any other. Maybe 1258.25 the bottom in the S&P 500 Index (Ticker: $SPX) in early June and a move above 1370.58 is imminent. Or maybe there is still a topping process happening and 1258.25 will eventually look like it would have been a good spot to get out. Only time will tell. But a look at the $SPX from 4 different perspectives suggests at least a pause, if not a reversal, should come soon.

S&P 500, Point & Figure

The 3 Box Reversal Point and Figure chart above using the Average True Range making a box size of 15.45, shows a requirement of a break above 1359.60 to signal the next leg higher. Also not that it has failed at that level before. It is a bullish chart but with some work to do to get through that level. On a break out the price target is 1575.90.

S&P 500, Andrew’s Pitchfork

The Andrew’s Pitchfork shows the price attracting to the Median Line of the green bullish pitchfork, and the Upper Median Line of the red bearish pitchfork just above. Time will tell if this boundary causes a reversal but it should at least cause a pause in the price action. The intersection is at 1360 for July 11th. That is rather close to the Point and Figure resistance.

S&P 500, Fibonacci’s

The Fibonacci chart has a lot going on. The purple Fibonacci levels measure the progress from the June 201 low to the April 2011 high. The Fan lines and Arc lines use this same scale. The blue Fibonacci levels measure from the April to June low. There are a couple of things to note. First the initial reversal in the down move has been rising the first Fan line higher. Second, 1344.03 is the next resistance, a 76.4% retracement of the down move and then 1370.58.

S&P 500, Elliott Wave

The Elliott Wave chart shows the $SPX in a corrective pattern within an bull market, perhaps printing Wave b of the correction. Of course it could also be the start of a Motive Wave lower that is yet unidentifiable. In either case it looks like a top is being built on at least a short term basis.

Four different looks at the S&P 500 and all point to at least a pause in the short term to fight resistance if not a move lower. This is what I see when I look beyond a few days. What do you see?

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