Is the Latest Market Rally Fizzling Out?
The financials have rallied and oil has peaked in price sold off from its highs and as a result we have witnessed a six day rally in the market. With technical analysis though it is hard to not find a flaw with this picture of the bull back in town.
The S&P 500 is what you need to take a closer look at because there is significant resistance at the 1275 level that just today is being addressed. Take a look at these charts:
Now this may or may not pan out overall; perhaps this rally has more steam in it? A few ways to play the downside though for those are interested comes with short etfs, specifically the S&P 500 Ultra Short ETF (SDS) and the Ultrashort Financials ETF (SKF).
What bears are looking for today is a for the S&P 500 to close below this critical 1275 level and in the red overall for the day. For bulls ending the day even mediocre shines a strong light that this rally may in fact have more upside left in it.
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Blain, other than the 1275 point, what are some factors that could indicate the end of the run for the S&P?
For the market currently you could also look at the Volatility index (VIX) which has sold off since its recent peak day above $30.
If the rally does ensue I will be looking for it top at the downtrending 50 day moving averages. That goes for the S&P, Dow, and NASDAQ.
I am waiting for the major indices to hit their 50 day moving averages before I turn bearish. For now the rally looks sustainable.