In my March 18 post, I showed that the ($SPX) had set up a classic counter-trend trade on the daily timeframe. Since then, the market has rallied just under 7%.
So where are we now? We can see on the daily timeframe that if we pull back further we may set up a stochastic buy. However, it is the weekly timeframe that I am paying more attention to here.
On the weekly chart below, you can see that this little 7% rally we've had may just be a pullback in a downtrend. If we trigger short on the $spx weekly timeframe it could be a tough summer for anyone who is long this index.
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How about the monthly chart?
It is setting for a stochastic buy?
Posted by: jr | May 11, 2008 at 09:43 AM
The monthly is not yet oversold enough for a buy signal. Perhaps a large selloff on the weekly will lead to a buy signal on the monthly.
Posted by: jstahl | May 12, 2008 at 06:35 PM
How about the (SPY)'s??
Posted by: Scott | May 13, 2008 at 09:34 PM
The (SPY) looks exactly like the ($SPX). Has not made it to oversold conditions yet.
Posted by: Craig | May 14, 2008 at 09:11 AM