The SP500 Index (SPX) fell on heavy volume on July 16th 2007. This led to a significant correction into mid-August. My opinion is that this was the market top. The ValueLine Arithmetic Equal Weight Index (VLE) and the SP500 Equal Weight Index (SPXEW) both topped in mid-July and did not make new highs in October.
Today is July 16th 2008 and we had a large volume up day. It remains to be seen if this was a short term reflex reaction on the 52 week anniversary, or if a sustained move up occurs. The move down last July was approximately 30 days. I will watch for signs of weakening in mid-August if today turns out to be more than a one day high volume move. We have seen a number of those in the past month. A mirror image will bring a new low in October and a bottom. SPX 1160ish continues to remain a level I am watching on additional weakness.
The QQQQ range square of October 2005 to October 2007 remains bullish. Price reclaimed the 50% price retrace today and bounced off the 1:1 parallel Gann Angle as expected of a bullish chart. Volume was well above average but below the number of shares traded yesterday. We need a traditional IBD follow through day early next week to confirm a rally. A follow through day is another move up on high volume 3-11 days after an attempt to form a low.
Chart courtesy of Stockcharts.com
Tags: Accumulation Day · Gann Angle Fan · Price Retrace · QQQQ · Square of Range · Standard and Poor's 500 (S&P500) · Value Line Arithmetic Index (VLE) · VolumeNo Comments
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