Here is the SPX daily chart since the end of 2008. Have a look at 1050 and initially be prepared for a marginal break before any decent bounce. You see, any break will get the lemming technicians telling everyone that more downside is assured. Then and only then can a bounce develop.
But ultimately, look at 950, which is a 50% retracement of the entire move from trough to peak and a test of the primary breakout.
Sounds right to me.
On the money post!
Nice analysis, Scott.
I think your comment on the DJIA chart is spot on re: “the speed and ferocity of the correction is a direct result of the inability of the market to correct while it was rising.” The way the indices moved up seemingly every day without even the smallest of consolidations from mid February into early April was ominous. It was just an unnatural move the way the market acted.
I looked back at some of my previous charts and found this one from July 2, 2009.
http://www.twitpic.com/d6zjl/full
The SPX got to 1219 (not quite the 1245 target) but close enough. 950 looks like it could be support, but I’ll want to see some solid base building before I make any assumptions.
Scott,
Are you talking about an intraday break like what we’ve already had or a close below 1050?