Wednesday, September 15, 2010

The big question

Very little change in the last two days. Bulls are getting nervous since we are approaching the 1130 level that stopped them twice in a row.

The big question on everybody's lips is "are we finally going to get out of the trading range"? Let's wait to see if SPX manages to close  above 1130 this week. 1130 was touched twice intra-day, once in June and once in August. However, the August high was a little bit higher than June's high on daily chart.

The most bullish chart in terms of establishing higher highs is on a longer time frame, on weekly charts. There you can see that we are already above the August peak. Of course the week has two more days to go but a potential close around 1130 is going to be 9 points above the 1121 weekly close on August.

You can see a small resistance level around 1135 and another one around 1145. After that is just a huge gap, gaps that tend to fill pretty fast. Also notice that both the uptrend and the downtrend lines are steeper on weekly chart than on daily one that makes the weekly chart looking more bullish than the daily one. A nice buy signal for long term players (assuming they are out of the market) is going to be a positive DMI on weekly chart but I don't see any sign that DMI is going to turn positive on this time frame any time soon.

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