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Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Tuesday, September 23, 2014

Stock Market -- Yet Another Technical Note

The current nasty little sell off is threatening to change the pattern of the SPX. The SPX
closed at 1983 today, and it will break the uptrend line in place since late 2012 if it breaks
and closes below 1980. To conform to the bullish pattern set since late 2012, the SPX should
have developed stronger positive momentum off the recent early Aug. low and be moving
toward the upper band of the trading range, now above 2050. It has not and instead is headed
for another test of trend support. The market is not yet at a classic oversold, and intermediate
term downtrends in MACD and RSI suggest there may be more negative chop ahead.

If the SPX does break below 1980, then there is "fail safe" support at the 100 day m/a. The
100 day m/a has been breached a few times since late 2012, but never by much and has served
as a springboard for the next up leg. We may see this play out once again but the recent
stumbles leading up to this possible crucial test of support suggest careful observation.
SPX Daily

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