S&P 500 Needs Close Above 1,083 for Gains: Technical Analysis

By Adam Haigh
Nov. 9 (Bloomberg) -- The Standard & Poor’s 500 Index needs to rise about 1.5 percent and close above the 1,083 level before the eight-month equity-market rally can continue, according to the head of technical analysis at Mint Equities Ltd.
The convergence of the so-called long-term downtrend and the medium-term channel suggests that the "preference to sell into the ongoing recovery" will reverse if the benchmark gauge for U.S. stocks has a "clear close" above 1,083, London-based Geoff Wilkinson, who looks at charts to forecast price movements, wrote in a report today. He said that 1,085 would be an acceptable closing level to trigger the change.
The S&P 500 rose 0.3 percent to 1,069.3 on Nov. 6, capping a weekly gain. The index hasn’t closed above 1,085 since Oct.
20, the day after it reached a 12-month high.
The gauge has declined 2.6 percent since on Oct. 19 on speculation the rally in equities has outpaced the prospects for earnings and economic growth. The S&P 500 is still up 58 percent since March 9 amid signs that government stimulus policies and record-low interest rates are helping to drag the global economy out of recession.

I see 1100 on the SPX within reach. Currently I'm holding some June 17 call options. They have been very profitable for more thus far. How is everyone else positionded on the SPX? If you trade the DAX or other equity indicies I'd like some insight into that as well...

Batman wrote:

I see 1100 on the SPX within reach. Currently I'm holding some June 17 call options. They have been very profitable for more thus far. How is everyone else positionded on the SPX? If you trade the DAX or other equity indicies I'd like some insight into that as well...

If you remember my post on our blog I am bull to around 1150's or a lil lower, by end of june into july

From there i tend to be more bear but I got to see if my pattern analysis pan's out hang tight there! those options are volatile.

Seekingalpha.com:

The S&P 500 broke above its 200-day moving average today and crept back into positive territory for the year. The percentage of S&P 500 stocks trading above their 50-day moving averages, which is one measure of underlying breadth, is now at 39%. While not great, this reading indicates that the market has at least picked itself up out of the doldrums. In terms of individual sectors, only Telecom and Utilities have more than 50% of stocks above their 50-days. Consumer Discretionary, Consumer Staples, and Technology all have readings in the 40s, while Materials, Financials, and Industrials currently have the worst readings.

Batman wrote:

Seekingalpha.com:

The S&P 500 broke above its 200-day moving average today and crept back into positive territory for the year. The percentage of S&P 500 stocks trading above their 50-day moving averages, which is one measure of underlying breadth, is now at 39%. While not great, this reading indicates that the market has at least picked itself up out of the doldrums. In terms of individual sectors, only Telecom and Utilities have more than 50% of stocks above their 50-days. Consumer Discretionary, Consumer Staples, and Technology all have readings in the 40s, while Materials, Financials, and Industrials currently have the worst readings.

Did they say which chart? Daily? I'm assuming...

Snapman wrote:

Batman wrote:

Seekingalpha.com:

The S&P 500 broke above its 200-day moving average today and crept back into positive territory for the year. The percentage of S&P 500 stocks trading above their 50-day moving averages, which is one measure of underlying breadth, is now at 39%. While not great, this reading indicates that the market has at least picked itself up out of the doldrums. In terms of individual sectors, only Telecom and Utilities have more than 50% of stocks above their 50-days. Consumer Discretionary, Consumer Staples, and Technology all have readings in the 40s, while Materials, Financials, and Industrials currently have the worst readings.

Did they say which chart? Daily? I'm assuming...

Daily.
This said let's see if the break of the 200-SMA holds. If it does, I'll consider to go back in (DAX probably)

Sauros wrote:

Snapman wrote:

Batman wrote:

Seekingalpha.com:

The S&P 500 broke above its 200-day moving average today and crept back into positive territory for the year. The percentage of S&P 500 stocks trading above their 50-day moving averages, which is one measure of underlying breadth, is now at 39%. While not great, this reading indicates that the market has at least picked itself up out of the doldrums. In terms of individual sectors, only Telecom and Utilities have more than 50% of stocks above their 50-days. Consumer Discretionary, Consumer Staples, and Technology all have readings in the 40s, while Materials, Financials, and Industrials currently have the worst readings.

Did they say which chart? Daily? I'm assuming...

Daily.
This said let's see if the break of the 200-SMA holds. If it does, I'll consider to go back in (DAX probably)

today is questioning the hold, i say it does hold i've been bul to 1150 ish, then short from there out back to 1050 levels of support. if that breaks big time bear!. to be honest look on the weakly chart! its long term bear with 200 SMA above it all!

Snapman wrote:

Sauros wrote:

Snapman wrote:

Batman wrote:

Seekingalpha.com:

The S&P 500 broke above its 200-day moving average today and crept back into positive territory for the year. The percentage of S&P 500 stocks trading above their 50-day moving averages, which is one measure of underlying breadth, is now at 39%. While not great, this reading indicates that the market has at least picked itself up out of the doldrums. In terms of individual sectors, only Telecom and Utilities have more than 50% of stocks above their 50-days. Consumer Discretionary, Consumer Staples, and Technology all have readings in the 40s, while Materials, Financials, and Industrials currently have the worst readings.

Did they say which chart? Daily? I'm assuming...

Daily.
This said let's see if the break of the 200-SMA holds. If it does, I'll consider to go back in (DAX probably)

today is questioning the hold, i say it does hold i've been bul to 1150 ish, then short from there out back to 1050 levels of support. if that breaks big time bear!. to be honest look on the weakly chart! its long term bear with 200 SMA above it all!

I'd say we'll only know in a couple of days whether it holds or not, there could be false breaks in this kind of environment.
This said:
- as I argued several times here, the daily 200-SMA is an important threshold. I'm not sure the weekly 200-SMA is that followed.
- I guess there are a lot of shorters' stops all along the way up to 1150 and above, if the 200-SMA break is confirmed I think there's gonna be some upside.

Sauros wrote:

Snapman wrote:

Sauros wrote:

Snapman wrote:

Batman wrote:

Seekingalpha.com:

The S&P 500 broke above its 200-day moving average today and crept back into positive territory for the year. The percentage of S&P 500 stocks trading above their 50-day moving averages, which is one measure of underlying breadth, is now at 39%. While not great, this reading indicates that the market has at least picked itself up out of the doldrums. In terms of individual sectors, only Telecom and Utilities have more than 50% of stocks above their 50-days. Consumer Discretionary, Consumer Staples, and Technology all have readings in the 40s, while Materials, Financials, and Industrials currently have the worst readings.

Did they say which chart? Daily? I'm assuming...

Daily.
This said let's see if the break of the 200-SMA holds. If it does, I'll consider to go back in (DAX probably)

today is questioning the hold, i say it does hold i've been bul to 1150 ish, then short from there out back to 1050 levels of support. if that breaks big time bear!. to be honest look on the weakly chart! its long term bear with 200 SMA above it all!

I'd say we'll only know in a couple of days whether it holds or not, there could be false breaks in this kind of environment.
This said:
- as I argued several times here, the daily 200-SMA is an important threshold. I'm not sure the weekly 200-SMA is that followed.
- I guess there are a lot of shorters' stops all along the way up to 1150 and above, if the 200-SMA break is confirmed I think there's gonna be some upside.

Just curious if you got a longer term view on the SPX/DAX, or do you see a fundametnal difference between the two? Im trying to gaguge a long term range on the (say into 2011)

Snapman wrote:

Sauros wrote:

Snapman wrote:

Sauros wrote:

Snapman wrote:

Batman wrote:

Seekingalpha.com:

The S&P 500 broke above its 200-day moving average today and crept back into positive territory for the year. The percentage of S&P 500 stocks trading above their 50-day moving averages, which is one measure of underlying breadth, is now at 39%. While not great, this reading indicates that the market has at least picked itself up out of the doldrums. In terms of individual sectors, only Telecom and Utilities have more than 50% of stocks above their 50-days. Consumer Discretionary, Consumer Staples, and Technology all have readings in the 40s, while Materials, Financials, and Industrials currently have the worst readings.

Did they say which chart? Daily? I'm assuming...

Daily.
This said let's see if the break of the 200-SMA holds. If it does, I'll consider to go back in (DAX probably)

today is questioning the hold, i say it does hold i've been bul to 1150 ish, then short from there out back to 1050 levels of support. if that breaks big time bear!. to be honest look on the weakly chart! its long term bear with 200 SMA above it all!

I'd say we'll only know in a couple of days whether it holds or not, there could be false breaks in this kind of environment.
This said:
- as I argued several times here, the daily 200-SMA is an important threshold. I'm not sure the weekly 200-SMA is that followed.
- I guess there are a lot of shorters' stops all along the way up to 1150 and above, if the 200-SMA break is confirmed I think there's gonna be some upside.

Just curious if you got a longer term view on the SPX/DAX, or do you see a fundametnal difference between the two? Im trying to gaguge a long term range on the (say into 2011)

I'm still bullish on the stock indices, say into 2011. All the stock indices are now ultra correlated to the SPX and can't see at that stage the rationale to play a relative value spread SPX vs other index (for instance DAX) : just go long, any stock index. Now I've been guessing that a "weak" Euro would ultimately help Germany, it looks like I've been right so far but I dont' exclude to go long SPX or DJI instead.

Does anyone use accumulation/distribution? If so, what other indicators do you use with it? How successful has this indicator been in predicting price movements for your respective equity trades?

===========================================================
Seekingalpha.com
By:Jeff Diercks

The stock markets have been trading in a wide range for the past three and one-half months. This maddening range of 9614-10720 on the Dow Jones Industrial average and 1010-1131 on the S&P 500 index has been chewing up both active and "buy and hold" investors alike.

Of course, trading ranges are the market's way of building up energy (or cause) for the next move either up or down and this consolidation is likely no exception. The million dollar question is then which way will this one break?

With all the negative news of rising unemployment, slowing growth and possible austerity measures both here and abroad, it would be easy to assume that the trend will be down from here. As a manager who tends to gravitate to the bearish side, deep down I would somehow love for this to be the case.

However we can see in the daily chart of the S&P 500 Large Cap Index (below), the accumulation/distribution index (see Stockcharts.com definition) is actually reflecting that investors have been slowly accumulating stocks during this consolidation period. Further, even during the May/June initial sell off stocks were really never distributed except at the July 1 range bottom.

Recent market price advances have been confirmed by corresponding moves higher in the accumulation/distribution index that show investors want to own equities. We believe this bodes well for equities and could mark the beginnings of a larger up move for stocks once we get over some profit taking on last week's advance and again move towards the top of the range.

Note also in the weekly chart of the S&P 500 Large Cap Index (below) that the accumulation / distribution index held prior support (green line) and are now crossing back up through the 28 period moving average, a short-term buy signal.

As a student of history it is important to note that the markets consolidated after a 50% + move in 2004 and moved higher the next three years. Could it be that we are setting up for a repeat of this move? It would seem counter-intuitive, but it's been said often that "markets climb a wall of worry."

charts can be seen in the link: http://seekingalpha.com/article/224032-little-used-indicator-says-market-is-headed-higher?source=dashboard_macro-view

Batman wrote:

Does anyone use accumulation/distribution? If so, what other indicators do you use with it? How successful has this indicator been in predicting price movements for your respective equity trades?

===========================================================
Seekingalpha.com
By:Jeff Diercks

The stock markets have been trading in a wide range for the past three and one-half months. This maddening range of 9614-10720 on the Dow Jones Industrial average and 1010-1131 on the S&P 500 index has been chewing up both active and "buy and hold" investors alike.

Of course, trading ranges are the market's way of building up energy (or cause) for the next move either up or down and this consolidation is likely no exception. The million dollar question is then which way will this one break?

With all the negative news of rising unemployment, slowing growth and possible austerity measures both here and abroad, it would be easy to assume that the trend will be down from here. As a manager who tends to gravitate to the bearish side, deep down I would somehow love for this to be the case.

However we can see in the daily chart of the S&P 500 Large Cap Index (below), the accumulation/distribution index (see Stockcharts.com definition) is actually reflecting that investors have been slowly accumulating stocks during this consolidation period. Further, even during the May/June initial sell off stocks were really never distributed except at the July 1 range bottom.

Recent market price advances have been confirmed by corresponding moves higher in the accumulation/distribution index that show investors want to own equities. We believe this bodes well for equities and could mark the beginnings of a larger up move for stocks once we get over some profit taking on last week's advance and again move towards the top of the range.

Note also in the weekly chart of the S&P 500 Large Cap Index (below) that the accumulation / distribution index held prior support (green line) and are now crossing back up through the 28 period moving average, a short-term buy signal.

As a student of history it is important to note that the markets consolidated after a 50% + move in 2004 and moved higher the next three years. Could it be that we are setting up for a repeat of this move? It would seem counter-intuitive, but it's been said often that "markets climb a wall of worry."

charts can be seen in the link: http://seekingalpha.com/article/224032-little-used-indicator-says-market-is-headed-higher?source=dashboard_macro-view

Not sure you re-open intentionally a thread from November 2009 (actually the SPX level would fit today's market )
I've read about accumulation/distribution in Farley's book : http://astore.amazon.co.uk/theloroftra-21/detail/0071363092 but never used it myself

Wow that is so ironic… i thought this post was for the current SPX haha. But for sure that level is close to the 1200 I watch! and a break above = higher moves for sure. But I'm still on the bear camp on this… soft financials!!!

on the accum distr…. yea I'm not sure, but most oscilators are just lagging in nature and are better used in paired indicator analysis or pattern analysis such as divergence btwn price and indicator or confirmation across other momentum indicators with trend for longer term time frames.

On the whole though don't say I use it much, not familiar with it, though I am looking to diversify my analysis a bit to improve my reads on different time frames. If anyone else knows more would appreciate more insights