On Tuesday morning at this time, the
emini S&P 500 was around 30 points higher than where it is now,
which placed the index above the 200 and 20 DMA's, a much stronger
technical position. Now we notice that the e-SPU is attempting to
tread water below all of its relevant trending moving averages --
the 20, 50 and 200 -- and the decline could be the formation of the
"right shoulder" of a substantial 9-month head and shoulders top
(see colored rectangles on the enclosed chart).If the e-SPU continues to weaken and
violates multi-month support at 1037/32, then the significant
downside potential of the top pattern will be triggered. That said,
such an obvious topping pattern usually requires a few knee-jerk,
whipsaw headfakes in the opposite direction to confuse the most
investors and to make sure that when the top pattern finally breaks
down it will actually seem like a complete surprise.If such a scenario is approaching,
then we should expect possibly a couple of violent rallies that get
everyone "twisted" into a positive frame of mind. From my technical
perspective, the e-SPU needs to hold above 1070 to avert more
immediate downside damage and to trigger near-term buying interest
that can pop the index to 1100 or higher in the upcoming
days.Without a doubt, the index is at a
crossroads. We might know in a matter of hours if the "right
shoulder" construction will be a "simple affair," as in straight
down from current levels, or of a more complex nature that includes
a couple of vicious short-covering rallies back towards the "yuan
high." Right now, my near-term work is telling me to expect the
latter, but to be prepared for the former.View the chart charts athttp://www.mptrader.com/middayminute/
Paulenoff Mid-Day
Posted by Peridot on 24th of Jun 2010 at 01:34 pm
On Tuesday morning at this time, the emini S&P 500 was around 30 points higher than where it is now, which placed the index above the 200 and 20 DMA's, a much stronger technical position. Now we notice that the e-SPU is attempting to tread water below all of its relevant trending moving averages -- the 20, 50 and 200 -- and the decline could be the formation of the "right shoulder" of a substantial 9-month head and shoulders top (see colored rectangles on the enclosed chart). If the e-SPU continues to weaken and violates multi-month support at 1037/32, then the significant downside potential of the top pattern will be triggered. That said, such an obvious topping pattern usually requires a few knee-jerk, whipsaw headfakes in the opposite direction to confuse the most investors and to make sure that when the top pattern finally breaks down it will actually seem like a complete surprise. If such a scenario is approaching, then we should expect possibly a couple of violent rallies that get everyone "twisted" into a positive frame of mind. From my technical perspective, the e-SPU needs to hold above 1070 to avert more immediate downside damage and to trigger near-term buying interest that can pop the index to 1100 or higher in the upcoming days. Without a doubt, the index is at a crossroads. We might know in a matter of hours if the "right shoulder" construction will be a "simple affair," as in straight down from current levels, or of a more complex nature that includes a couple of vicious short-covering rallies back towards the "yuan high." Right now, my near-term work is telling me to expect the latter, but to be prepared for the former. View the chart charts at http://www.mptrader.com/middayminute/
thanks for that post
Posted by jbidmt on 24th of Jun 2010 at 01:37 pm
thanks for that post