Quarter's End

It is a good practice to look at different charting time-frames so I have a calender reminder set to jog my memory to look at Quarterly & Yearly charts. It is interesting to see the moving average levels as well as the recent action. Take for instance the S&P 500.

By looking at this long term yearly graph it looks as though the S&P has made a double top and somewhat retraced this year. It is fairly easy to see the moving averages acting as major support.

Now let's take it down to a Monthly time frame and focus on that double top. Is this looking more like a cup and handle now? The bottom of the cup being the 200 month EMA and the handle tracing back to the Long term Fibonacci fan line. Most importantly we can see that resistance going higher will be met at the 50 month EMA - 1311.

It's pretty obvious that the Financials or XLF will tip us off to the overall direction of the market. Here's a 10-year Quarterly. See anything interesting. I thought the close on the 23.6% Fibonacci line as well as the high of the quarter just above the 38.2% fib and yet below the 50 EMA. The bailout may move the XLF higher, but I believe getting short the XLF above $24.50 using the 50 -EMA as a stop could be decent trade.

The consumer staple stocks are sporting a cup with handle. However it could be viewed as a failed breakout with that blowoff top of this quarter. Bottom line here is the 50 EMA is crossing the 200 EMA and XLP is worth watching a little closer. An Call entry point in the low $26 range with a stop closely below the 100% fib line of $25.92 may be a decent hedge to all the short plays to be put on after the bailout is announced.