Tuesday, March 4, 2008

S&P 500

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In my last "Technical Analysis" post on March 2, 2008 I have mentioned about negative stock market sentiment on the 60-day chart and possibility of the further slide. Today we had some changes on this chart view, and I would like to go back to this chart again.

SP 500

As we may see the majority of the technical indicators are turning from the oversold levels into recovery mode. From the chart above we may see that today

1. VIX index started to decline – the number of panic seller is redusing

2. RSI crossed the 30 line and is moving up

3. Stochastics is rising after running over 20 level by indicating the move out from the most recent lows

4. MACD is rising

5. A/D volume and issue oscillator is rising showing us the traders are more focusing on the advancing stocks.

6. SBV Oscillator is rising – that tell us about possibility of the changes in the supply/demand balance
There are still a few factors that may point to the further volatility, falt ar down market:
1. The SBV is still very low – it would be nice to see it moving higher.

2. The MVO is still low – it would be nice to see it equal to zero.
The most positive factor for me are the high volume surges and that at the end of the session recovery was on completely negative news - I have not seen so negative news in Yahoo finance and CNN money for a while…

As I mentioned several times, the recent drop was mainly caused by the high volume on February 26, 2008 in the S&P 500 and DJI sectors. We did not saw the similarly high volume in the Nasdaq 100 sector and as a result the recent drop was lead by the S&P and DJI mainly. Now, after 4-session drop, I think we could be going into the Bull market back. Let’s see what we have tomorrow…

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