Exposing Ideas to the Envelope of Serendipity



Contact moo at: bluechipbulldog@gmail.com



Wednesday, June 30, 2010

Tuesday's Tumble Challenges Key Support

Just as increasing numbers of failed bearish patterns during the bulls' run signaled higher prices were on the way, the mounting tally of failed bullish formations during the recent correction raises a red flag for bulls. Tuesday's tumble sliced effortlessly through the primary trendline off the April high, invalidating the faltering falling wedge pattern and setting a new 2010 closing low. Similarly, the typically bullish double bottom base failed last week, and long-term support on and around the 1040 area is being seriously challenged. While we may see a bounce out of short-term oversold conditions before too long, until or unless major repair work is done by the bulls, any bounce to near-term resistance will likely be a gift to bears. And while the Fourth of July Week has a reputation for being most often bullish, it is worth noting that the days leading up to the holiday trended lower the past two years. Let's take a look at the battered $SPX, with its large head & shoulders pattern now "in play" as neckline support in the 1038/1039 region is probed.


Trade well.

-- Brinkley
__________
blog comments powered by Disqus