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.
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.