This all time yearly chart shows how important the current levels are:
Bottom line is a break of 872 will drop into the next channel down at least mid-way or 800. The ominous thing on this chart is the 50 year simple average of 452. Granted it may take a few years, but a test of this level looks inevitable.
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Monday, July 6, 2009
Same chart as last post but using the Exponential moving averages of 5, 20, 50, & 200. Everyone makes such a fuss about the 200 day simple moving average which is acting as support. In this case the one to watch is the 50 day EMA which is now acting as resistance.
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Everyone in the media is now completely Bearish jumping on the damage control statement from the newly appointed "Potsy" VP Joseph Biden regarding the latest jobs report. The report was, "worse than expected". But keep in mind the buzz number has been repeatedly stated as reaching above 10% for unemployment. Factor in the Obama gang has 90% of 770 BILLION dollars left to release from the FIRST stimuls package. By the way what are they waitng on?
Anyway, this could be shaping up to be a huge fakeout to the downside and the setup for the year as far as an S&P run to 1050.
The VIX is telling the story as well in this 2 yr weekly. A small bounce can be seen, but the overall longterm trend is still down meaning Options should be getting cheaper. But PUT prices are the most expensive since before the Lehman collapse as people hedge to the downside to protect the 40% plus gains from March. AAAHAAA, they are NOT selling, but merely buying protection with Options.
I'm inclined to see 880 S&P hold this week and the stairstep run to 1050 begin. Here's some mental imagery: Obama sitting back in a reclyner fanning himself with 770 Billion dollar bills with a caption above his head reading, "Who get's the bone? North Korea? Iran?, Banc of America?, Goldman Sachs?, California?"
Back to what are they waiting for? They are waiting for the Pain level to be excruciating. Only to insure their HERO status is tatooed on every voting American.