is a robust instrument of economic stimulus.
$INDU 50 day average = 11680
$COMP 50 day average = 2354. The Nasdaq is fast approaching its 200 day average, from below.
The S&P 500 is just below its 50 day average which is 1297.
Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!
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Lots of people will have lots of time to think about that over the weekend.
We’ll see what Mr. Market comes up with next week.
Thanks, Wood.
Have a great Dixie weekend.
Looks like the SPX close right dead nut on the 50 day.
Shed, nice observation, as usual. I think the 200 DMA will offer more resistance than the 50 DMA (although with the NAZ they’re one in the same). I think that’s where the psychology is at this time. We’ve still got some ways to go before I turn my paper wad into stacks of cold hard cash.
Wood … what’s your take (RSI/MACD) take on this:
The current uptrend, Intermediate wave B should be nearing completion. At the beginning of the rally, we anticipated an abc uptrend, limited by the OEW pivots: 1287 - 1240 - 1327. The market rallied to 1291, then pulled back to 1234, and now has rallied to a high of 1298 on friday. The OEW pivots have worked remarkably well since their inception. Also of note, a typical fibonacci retracement of the 240 point Intermediate wave A suggests: 38.2% @ SPX 1292, and 50% @ SPX 1320. Therefore both technical approaches suggest this uptrend is now approaching its upper limits.
Lastly, as we noted in friday’s report, we are beginning to see negative divergences appearing on several timeframes. Specifically, the SPX/DOW hourly is displaying negative RSI/MACD divergences; the SPX/DOW daily is displaying a negative RSI divergence, and reaching the typical upside limit for MACD; and the SPX/DOW weekly is reaching its typical RSI limit, with a lackluster MACD.
E8, re: the negative divergences your comment mentioned…
SPX is displaying negative MACD divergence on the hourly bars. Currently, MACD differential is at .10, while on 8/5/08, MACD differential was at .29, on the hourly bars. So, for the very near term, MACD is diverging negatively from price.
SPX is displaying a negative RSI divergence, but it is very very slight. For typical upside MACD, over the past year, there is only one time the MACD has gotten much higher.
The SPX weekly is NO WHERE NEAR its typical RSI limit, if one is using an RSI(14), which is fairly standard.
One very very important point to consider: If this E. Wave site is not divulging their period MACD and RSI settings, then you have no way of trading their signals. For all you or I know, they could be changing the period settings ( RSI(2) or RSI(14), or MACD 12,26,9 ) with every recommendation.
Anyway, get the periods they are using, and find out if they use the same periods, all the time.