S&P … CHART … putting things into perspective

As fundamentals are “out of favor” at the moment … here the chart perspective for the S&P:

Copyright by Tradestation

As you can see … the S&P started its downtrend in October 2007 and accelerated one year later into a virtual free fall.

After testing the parallel of the connection of the 2 highs (2000 and 2007), the market reversed course by performing a classic “bear trap” in March 09.

Despite the sharp upmove, we so far retraced only a MINOR portion of the recent still dominating DOWN TREND.

Interestingly … AT THE moment … we are retesting the former weekly Downtrend.

As this is the first attempt to break back into this down channel, chances are good to correct first a part of the current bear correction.

Remember … a WEAK market retraces up to 38%, a normal market between 50% and 62% and a strong market up to 77% or even more.

So far … we have a sharp FIRST corrective move … which should now start to lead us into a correction of this move. How far this correction of the correction will lead us, will determine, how far the “whole” corrective move might take us … to THEN decide, WHAT TYPE of market we are in.

RETRACEMENT LEVELS for the corrective move are:

822 … Minimum … 760 … Normal … 720 … Maximum

All considered that we already have seen the high for this move by now (probable as market seems tired)

So don’t get overwhelmed by the “experts” … wait for the correction … it is not the time to invest into equities now

Tags: Chart, outlook, S&P

This entry was posted on Dienstag, Mai 12th, 2009 at 13:26 and is filed under FDAX. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.