Longer Term Look at S&P 500

• alphatrends
• October 31st, 2009

The trendline from the March lows was broken this week, but trendline breaks do not assure a reversal, they indicate a slowing of the trend. The SPY is still showing a weekly pattern of higher highs and higher lows. A break below the October low of 101.64 would create a lower low, but that would not be the ideal short entry as the market has already expended quite a bit of energy getting to these levels. A lower low followed by a rally which falls short of the 110 area would be of more concern, especially if the volume were to trail off significantly on such a rally.

The majority of earnings reports for the third quarter are now behind us and it appears to be a case of “sell the news”. This past week a lot of participants were reminded of the importance of a strong defense as the market started to acknowledge risks after what has been a great rally.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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