S&P 500 Daily Analisys (23/09/2005)

Discussion in 'Journals' started by outoftheplane, Sep 23, 2005.

  1. This is a great analysis from 3stocks website for SPY today:


    1. Chart

    2. Prior Day

    On yesterday's session the SPX had a relief rally, recouping a small part of the sell off it had since the FED meeting on Tuesday. This was due to reports saying that Rita hurricane was now a Category 4 storm instead of 5. We have to put this in perspective. When Katrina attacked the US the SPX was at 1207.6. Nine days later it was at 1247.4 and it never traded below the «Katrina open». Knowing this, of course nobody is selling because of Rita, that's only the media's hype. The sentence: «The market never dances twice with the same partner» certainly applies here.

    If we take a look at the oil market, we can see the same behaviour: since prices went down sharply after Katrina's gap up, we naturally don't see much enthusiasm on the bull camp with Rita.

    3. Support & Resistance

    Supports at 1203.8 (low of the Katrina open)/1182.6 (prior low with huge volume) and 1177 (the closing of a gap open between 1177 and 1180.1)

    Resistances at 1213.5 (midpoint of the body of the last red candle)/1216.6 (ascending trendline was support, now it is resistance and it was yesterday's high)/1247.4 (30 month high and the top of a possible double top formation)

    4. Candlesticks & Volume

    What we have here is an imperfect thrusting candlestick pattern, which is a bearish continuation pattern. The market opened and then traded higher during the session, but failed to close above the midpoint of the body of the last red candle. We've had a failure to rally in a down market. Because of this failure, the bulls will be discouraged and a lack of buying will let the downtrend continue.

    Volume was weaker on this positive day than on the previous two negative days.

    5. News

    We've had these significant news:

    «Aluminum maker Alcoa warned that it will see third quarter earnings far below forecasts, as it blamed the rise in energy costs caused by both Rita and Hurricane Katrina.»

    This is the first sign that companies will blame Katrina to lower their revenues and earnings forecasts. Alcoa has started the «warning season».

    «And software maker Oracle reported improved fiscal first quarter earnings that met estimates, but disappointing revenue as well as second-quarter guidance that fell short of targets drove shares down 3 percent in European trading Friday.»

    No significant economic reports or other market moving events are expected today, other than Rita watch, of course, but that probably won't have a lasting impact on general stock prices.

    6. Overview

    Reading this analysis and thinking about it I am short term bearish on the S&P 500. Futures point to a higher open against the ascending trendline (previous support, now resistance) but that higher open will probably fail to hold.

    We have a medium term double bottom pattern unfolding as you can clearly check on the chart above.

    I will be wrong over the short term if the market closes back above the ascending trendline which for today stands at 1216.6.

    7. Trading Plan

    The plan is to go short at the open and hold it through the rest of the session. On close IF SPY<121.66 => HOLD short positions. IF SPY>121.66 = BUY TO COVER short positions.

    David Randolph
  2. Learn how to spell the word ANALYSIS first.

    Then perhaps people might take you seriously.
    Too many kids playing on the Internet these days.

  3. Apex,

    It is obvious from the quote above that he knows how to spell it. Do you have any constructive comments to offer?
  4. I believe that the above post should be in the Journal Section.
    Do you disagree, or should everyone be able to "hawk" newsletters and websites on ET?
  5. It's obvious Apex knows that he knows how to spell it, do you have any constructive comments to offer?
  6. Ok.
    Since you have no problem with people "hawking" their analysis and websites on ET, here's one that I am familiar with ( complete with SPX chart ) and one in which I have known the author Bob Kendall since 1981:

    Technical Update for Friday September 23, 2005

    "Yesterday’s action finally was able to close higher after three days of declining prices. The configuration suggests there is an 80 percent probability that the market rendered a bottom today. A higher close today will confirm that a low is in place. The pattern that has unfolded over since the August highs has been a 5-3-3(A,B,C) corrective wave formation suggesting that today is likely to have been a major bottom. To confirm that the wave 2 has been completed a close above the 1230.50 level will be necessary. Today the resistance is at the 1219.60 level. A penetration of this level will indicate an extended rally toward the 1224.15 level.

    Key support is at the 1212.15 level with the critical support at the 1208.60 level.

    A penetration of this level will signal a decline toward the 1203/1201 levels indicating a pattern failure. Since today is a weekly close it will take a close above the 1224.40 level for a bullish indication for next week and a close below 1210.00 to indicate lower prices for next week.

    Expect higher prices today with 60 percent probability for a close above the 1219.60 level today."
  7. etc.
  8. Thanks for straightening me out. Apex said, "Learn how to spell the word ANALYSIS first." How is it obvious to you from that quote?

    Nonetheless, thanks for pointing that out. Rough day, I guess. Your handle suits you well. :)
  9. Based on the website and his comments, it looks more like a journal to me than a guy "hawking" or "vulturing" :) anything.

    I think he probably doesn't know that there is a Journals forum on this site.
  10. Probably so.
    #10     Sep 23, 2005