Last post was a while back, I have been investigating some quantitative approaches, but I thought I would update the SPX weekly chart and my thoughts on the market.
First, in April the market was on the upper channel resistance and we
dropped about 10% from there the possibility of Central bank
intervention kept us from moving any lower. At this time the bounce off
that low seems to have formed a bullish flag which targets the near term
highs in the SPX. Now, thats a bit too bullish for my taste but I have a
few participants that I believe are better at this than me who believe
that might be were we are headed. So take a look
Right now i think the markets have the bulls wondering why they should buy and the bears worrying about getting stopped out of their positions. Everybody is waiting for news to clear the air a bit, last couple of days the volume has been pathetic and I think might continue to be so. (Maybe the volume has been this pathetic all this time, we just don't have Knight Capital fooling us anymore?)
Anyways, near term targets seem to be the 1440, 5/08 high and it that breaks then we're going all the way up to 1600 (I doubt this level will be reached this year)
On the Central Bank front the Fed's next meeting is in September and will probably decide on a mortgage twist type intervention and while Europe is on vacation now, more news or decisions on the Euro front will be forthcoming in September. And it seems likely that news would support the market with some kinda of Greek exit which is already priced in. I heard a comment "Lehman has taught us that loosing a few billions in bailout is better than 100 or more times that in case of bankruptcy", that makes sense and after all paper money has no limits on capacity. Anyways, its the world we live in.
