Wednesday, November 26, 2008

Today's Market

As promised, here's a look at yesterday's market.

Click for a larger image

Above is a chart of the SPYs (S&P tracking stock). It also contains the triangle consolidation pattern which prices broke through about a week ago. Note that prices have rebounded and moved through the lower line of the previously established triangle. This line was at approximately 84 (which is 840 on the S&P chart) -- a very key technical trading level right now. Also note the following:

-- All the SMAs are moving lower (for more on this topic, click here)

-- The shorter SMAs are below the longer SMAs


-- Prices are above the 10 day SMA which is a positive technical development.

Take a close took at the volume for the last three trading days. Note that although prices were increasing volume was decreasing. That led me to draw the following possible new trend lines:

Click for a larger image

It's possible the SPYs are now forming a downward sloping trend channel. This would signal an upcoming orderly price decline.

I should add that frankly the market has me pretty much stumped right now. Usually there is some type of pattern in the chaos that an analyst can latch on to. Right now there is so much going on fundamentally that the technical picture is extremely cloudy. I wish I had a better answer than that right now, but it's what I've got.