In the prior two stock market posts (4/13 and 5/20), I
opined that a weak market might be at hand, with the S&P 500
vulnerable down to 1200.
I have been looking at various technical and "black box" sites
and I have noticed that warnings and "crash alerts" seem to be
cropping up just below 1250 for the 500. Whoops. Did I miss
something? Here I thought a nice 10% price correction or haircut
following a decent period for the big caps and a spectacular
twelve month run for the small and midcaps seemed reasonable.
'Tis the season for a little weakness and most stocks were
extended to the upside. I do not know whether the "500" will
fall to 1200, but if it did, I would not find it particularly
troubling. Folks have to be allowed to take good money off the
table from time to time.
I have included a weekly chart of the S&P 500. It shows a
developing intermediate term oversold (RSI and Stochastic) and
it shows the market against its 40 and 69 week M/Avs. Click here.
Note that the 69 wk M/Av has provided excellent trend support for
the market in recent years. A firm hold at or a little above
this average would be an encouraging short term sign.
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