My short term view of the market is that it is very weak and most likely has topped until a retest or new low is put in - probably in October. But the longer term charts show the total market in a strong position when using the July 2007 to July 2008 range.
The Value Line Arithmetic (VLE) Index again bounced off the 1:2 descending Gann angle after breaking above for a few hours. Notice that the slope of the move up remains above the 2:1 ascending angle (or twice the slope of the move down). The market is in a strong position until price breaks the 1:1 angle. It is possible this move only makes it to the 2:1 angle about 4% below the current price.
The SP500 Equal Weight (SPXEW) Index is also above the 2:1 angle within the Gann fan. If price breaks through this angle then it will probably move to the 1:1 angle which is about 5% lower.
It is important to watch for follow through continuation to the downside before trying to short this range bound market.
Tags: Gann Angle Fan · Growth Stocks · Slope · Standard and Poor's 500 (S&P500) · Value Line Arithmetic Index (VLE) · VolumeNo Comments
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