Sunday, June 7, 2009

Weekly Watchlist 6/8

Going into this week the market is still battling up here near the January highs at 940 on the SPX. It's all about the 200 day moving average from here. The 200 day ema is 943 and I would like to see a weekly close above that area to get more delta positive. The market seemed a bit jittery the past few trading days so I want to check out the long term monthly chart this week of the SPX.

As you can see the huge rally we have seen has not even gotten us back to the 20 month moving average. Nor has it touched the 200 month ema. That level is 1001 on the SPX and it seems as if between 1000-1200 will be formidable resistance if we can even get up to challenge it in the coming months and years. This is one reason why I think the long term picture (1-3 years) could be more of a sideways pattern that produces an excellent trading market rather than a full blown uptrend. The point I want to make is that the past two years have damaged the long term charts and it takes several years for damage like this to correct itself. Time will be needed more than any government programs or "hope".

Looking at the shorter term I still think its going to come down to this 950 area just above the 200 day ema. If we can eclipse it, then we should see the 980s quickly and possibly 1000 being tagged just for the hell of it. That's when I think we might pull back and consolidate into the summer. It might happen, it might not happen. But that's what I would be preparing for just in case.

The watchlist:

Triangles and Pennants>>> ABT, ADS, ABAT


Breakouts>>> ADBE, ISRG, KCI

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