Daily S&P 500 INDEX TRACKER

[winner69]

Hey Hoop ... watch this video .... DEATH CROSS

http://broadcast.ino.com/education/s.../?campaignid=3

Your challenge is to get your charts onto video with a commentary .... and get Vince or whoever to get them posted on sharetrader

[Hoop]

Hoop, after the 2002/3 bottom there was a similar death crossing of the 50/200 MA that came mid 2004 - about 18 months after the bottom.

Now we have a similar situation - Again about 18 months after the bottom.

Are you saying that this time its different? Or are we going to have to wait about 3 months to get back where we are now and still be higher than the last high by year end?

This time looks a bit different from the perspective that the swings are more extreme (probably due to higher volumes than in 2004) but the elapsed times look about the same. (Similar observation to Phaedrus's (in)famous NZ50 graph that suggests history repeats.)

Thoughts and analysis appreciated.

Hi Belg
yep similar situation....am I saying this one is different ? yeah probably... From my chart your example was not a H&S breakout so its outcome would be statistically different.

From my small chart below....I have identified one event which could be statistically similar to whats happening now... the H&S formation in 1997 with its break out in 1998 which resulted in a year long bear trend within the cyclic bull market. At that time it would've been hard to know whether to call a year long bear trend a cyclic event or not...in hindsight looking back into the past using a long term chart its easy to see that the 1998 bear was a trend.

However trend or cycle.. at the time the bear behavioural features are the same... there were 2 sucker rallies in that 1998 bear trend

Not knowing if this latest cyclic bull market has died or not leaves us with 2 references from my limited time chart below the 1997/1998 a bear trend within a continuing cyclic bull market similarity.... or the possible 2007 end of cyclic bull trend scenario. (no doubt a longer time frame would bring up more examples and a more data to forecast)

If it is the 1997/1998 similarity then history says this could be the last severe drop before the steep recovery ..this history duck lines up in the same row as the Bulkowski statistic duck ...so this is my favoured forecast.

S&P500 to be 1250 or higher by Xmas would be a better bet than...
The premature sudden end of a cyclic bull market and a retesting of the March 2009 bottom... which would be seen as unusual in a global economic recovery cycle and would show to be a leading indicator for some sort of "black swan" event to happen.

Hey Hoop ... watch this video .... DEATH CROSS

http://broadcast.ino.com/education/s.../?campaignid=3

Your challenge is to get your charts onto video with a commentary .... and get Vince or whoever to get them posted on sharetrader

Hi Winner
I sometimes watch Adam Hewison commentaries and they are interesting but not always accurate. His mention of the Death Cross (DC) as being very reliable is misleading to the lesser experienced TA audience he is catering towards. The name DC is over dramatic, and to many people it conjurers up that bad things are about to happen. DC's happen often in a cyclic bull market during corrections and also when a bull enters into an extended range bound situation. (see chart).
Often during a cyclic bull market when a Golden cross (GC) occurs quickly after the DC it shows another genuine rally is underway.
GC's are much more reliable in a bull market..I don't know if it is a TA practice, but I have found that if I can't draw an accurate trend line I use a GC point as a reference point to draw that trendline...it seems to work well for me.

Here's another thought for you Hoop.

Could the bearish behaviour have little to do with the overall market and much more to do with the new US banking regulations?

5 day comparision of S&P500 against the Banking index here http://finance.yahoo.com/q/ta?s=%5EG...vm,vm&c=%5Ebix

Last friday, the banking index down 4 percent while overall down just 0.5 percent.

Some of the big banks got hammered see here ... (this link wont make sense after monday)

BAC down 9.9%
C down 6.25%
JPM down 3.6%

Very few bucked the trend and even then not by much.

I haven't got the tools to strip the ^bix from the rest of the S&P500 but if you do I wonder whether we've hit a death cross at all.

(BTW - the 2 year chart of the ^bix vs. the ^gpsc shows just how much fun there was to be had trading the stocks in the ^bix. The 3 month chart shows interesting stuff too.)

Perhaps regulation is influencing the short term situation more now than before ..but these secondary factors and other factors we have not thought of are all factored in....so I don't think about it, I just make sure I'm aware of it happening.

Leaving a badly behaving sector out of the index and recalculate comparing it to all historical data is manipulation of figures..Belg.... A naughty practice that Politicians are good at.

[ananda77]

...really hopeless re: this kind of analysis so lets Mr. Chenard do the talking

stocktiming.com:

The Long Term Bull/Bear Model for the S&P 500

... monthly chart for S&P 500. At the end of January 2008, we had the red/blue trend lines crossing over which said we had started a bear market condition. On August 31st. 2009, there was a monthly upside cross-over signifying we started a new bull market condition

Monday, July 12th:

The Long Term Bull/Bear chart is below. Note the 1103 level, which has been a testing level for the previous two Bull Markets. In the past two weeks, the MACD Histogram dropped so we said that this was a similar pull-back profile like we saw during the past two Bull market tests of 1103 (note the gray/blue rectangles I drew showing showing the pullbacks). At the close on July 2nd, the red/blue trend lines had converged and touched just like the previous two Bull markets and it happened at the same 1103 testing level.
Last week we said, "For now, the up trend is still in place BUT it will be tested during the coming weeks and ----we could even see a capitulation drop with a quick bounce that would keep the red trend line from falling below the blue---- This could be a very challenging event for traders." Here we are on Monday, July 12th. and those comments haven't changed because the red/blue trend lines remained converged
At the same Bull Market test level in 1998, it took 3 months for the S&P's tick to push back above both the red and blue trend lines for a resumption of the Bull Market. Some of you may want to tell yourself that "history repeats itself and will repeat itself here as well". That could prove to be true, but it would also be "a speculation" as opposed to a condition with higher safety odds under the present circumstances. While the C-RSI had remained positive during the entire S&P 1103 testing time in 1998 AND 2004, this time, we have seen a negative C-RSI reading in 4 out of the last 8 months. So will the previous Bullish pattern repeat itself now?

Kind Regards

[evilroyrule]

interesting thoughts belg. certainly the way my stocks opened today more of a weighing exercise than panic induced selling. simply refusing to go down (any further at least). intriguing week ahead.

[Footsie]

given the price action, all traders, bulls and bears should be on alert.
the market is not really in a new trend yet. short term the bias is down, but there is still some upside momentum on a longer term scale - altough that is fading fast.

[ananda77]

Trader Update -data point 19 July 2010:

...the SPX 500 managed to open higher but gains quickly evaporated; however the index nevertheless appears to stabilize after an intraday *1061
chances are, the current set-back from the July 13 High *1099 will extend down to *1058 (possibly as far down as the *1050 psych barrier) before a more bullish bias will resume IF the support zone is successfully defended

...a successful defense of the support zone would motivate the market to start another leg up with the June 19 High *1119 and potentially, the June 21 High *1131 as targets

...look for a bullish trade above *1070 – target *1130 – stop *1047

Long Term:

Kind Regards

[mattyroo]

A77, always interesting to read your take on the S&P. But, why not wait until the market has closed to give some analysis???? What's with the desperation to post something before the market has run the days course?

It makes your analysis look wrong headed sometimes when the market carries on doing something entirely different to what it has done prior to your post. It would also give more insight, if you had the full days market events in your posts, rather than half the day.

[winner69]

Esp for Hoop but others might appreciate

http://www.hussmanfunds.com/wmc/wmc100719.htm

[Hoop]

Esp for Hoop but others might appreciate

http://www.hussmanfunds.com/wmc/wmc100719.htm

Thxs for that Winner... yes..its is an academic post which I love to chew on and I admit its not everyone's cup of tea.

Amazingly that Hussman article you posted cleared up a problem I was tackling recently. My problem was charting the DOW** / 10 yr Tbills relationship which showed an inverse correlation up until 1982 then all of a sudden the relationship reverted 180 degrees to that of a normal correlation... At the time I couldn't find any decent quality info as to how and why this happened? Well that Hussman article showed me the path to explore now...it seems it was the FED Model influence at work here and it causing false market assumptions (forward)....read in between the lines its interesting to see Hussman thinks this correlation could be breaking back the other way again (another extra downward pressure on the Equity market as 10 yearT bills are expected to rise eventually).

** same result if I used S&P500 instead of the DOW

Also...for some strange reason the Q-ratio had fallen off my personal indicator list... I have now added that back on.

Geez ..Hussman has pointed out very convincingly how big secular downward pressures are operating on the American markets.

[ananda77]

Trader Update -data point 19 July 2010:

...the SPX 500 managed to open higher but gains quickly evaporated; however the index nevertheless appears to stabilize after an intraday *1061
chances are, the current set-back from the July 13 High *1099 will extend down to *1058 (possibly as far down as the *1050 psych barrier) before a more bullish bias will resume IF the support zone is successfully defended

...a successful defense of the support zone would motivate the market to start another leg up with the June 19 High *1119 and potentially, the June 21 High *1131 as targets

...look for a bullish trade above *1070 – target *1130 – stop *1047

Kind Regards

...market internals developed constructively and NYSE Tick showed buying interest following at the SPX 500 *1061 intraday Low today
as a consquence, a bullish bias likely to develop above *1070/*1072

...downside risk high below *1064

Kind Regards