Today’s move was on lower volume on all indices I watch. Volume could come in later … or not. A short squeeze would kick off higher and that could bring in panic buying. (We always think of panic selling but there is panic buying also.)
I found an interesting chart last week - the SPXEW - which is an equal weighted SPX index (similar to the VLE). I worked up the ranges and it has a defined cycle.
Chart courtesy of Stockcharts.com
Notice how the price hits (almost) the diagonals of the original range. This is a good sign that the range is valid. Price then followed the 2:1 blue Gann Angle up until it hit the 2:1 red Gann Angle which changed the trend. This was near the 50% price retrace level and the 25% time line. Price is now following the 2:1 descending (red) angle and passed right through the 1:1 ascending (blue) angle. Fortunately, price bounced off the 25% retrace line. Until price breaks above the 1:1 ascending (blue) angle it is in a weak position. If it does break above then this could bring in the buyers.
Post Modified: July 3rd, 2008 at 12:36 am
Tags: Gann Angle Fan · Price Retrace · Standard and Poor's 500 (S&P500)7 Comments
7 responses so far ↓
Volume was low today because of golf…
I say Goldman kicks ass tomorrow and we go higher…
why not: GS kicks ass, and we get a low PII, suggesting no rate hike anytime soon, and we get panic buying to propel the markets up 4%, leading to a 6% gain by friday
Another thing to note is that the SPXEW topped in July as the VLE did.
Andy, this chart actually shows the July peak a lot better than the normal SP500 one. Based on the 50:50 thing, one could argue that the market should go to around 1850 by mid july…. any idea where that would be on the standard sp500? (1450-1500?)
Kurt - The SPX shows the mid-point of the similar range (Oct-Mar) as around 1420.
When are we going to have 1 day of total bull rally combined with tons of short covering and more rally..
sick of this market ..
Tk, I hear you, pretty damn frustrating just drifting…