View of the S&P 500

In the weekly review of the S&P 500, there are some interesting chart points to note. Let’s look at the up to the minute charts:

The daily chart is working off a new momentum low, which indicates a probability that the new price low has yet to come.

The S&P and Dow Jones are both seemingly in the middle of a bear flag pattern, which is projected to take the S&P down to 1,280 by mid-February if it unfolds.

Price is still in a daily confirmed downtrend, and price just reflected off the horizontal resistance line just beneath the 50 period moving average.

Odds still favor lower prices yet to come until this trend changes.

Onto the weekly chart:

The market never made a full retracement of the recent price swing, which took price from 1,500 down to a low near 1,275. It’s actually made approximately a 50% retracement (Fibonacci) but 1,400 served as key resistance on the S&P index.

The new weekly momentum low in the oscillator does not bode well for the price. New weekly momentum lows can mean actual lows are yet to come, and will take price much lower than any daily momentum low.

Price could retest the rising 200 period MA for a bounce, but that bounce has already occurred and it looks like a second test has high odds.

As a bonus, let’s peek at the monthly chart:

The case for the bulls looks in-tact here, due to the support from the rising 50 period moving average, but should that fail to hold, any remaining long-term bullishness would become immediately suspect.

We need to see monthly closing prices for any long-term signals, but the fact that January closed beneath the rising 20 period MA for the first time since mid-2003 is a rather ominous sign.

This market is extremely difficult to trade right now, so be careful and watch your risk levels.