Stock Market -- Technical

Since the latter part of 9/09, I have been suggesting using a degree
of caution regarding the stock market. Some reasons are technical
and some have been fundamental. I have not forseen anything fatal
ahead, just the need to realize the market has come very far very
quickly and that there has been some slippage in the fundamental
narrative.

Today, the SP 500 cracked the uptrend line under this mild rally
which has been underway since late October and which has barely
earned the term "rally". We now have a slight oversold condition
with no confirmation that the shorter term trend has actually
turned down. Just a caution light for the break below the 10 and 25
day m/a's. Now, the SP 500 closed at 1116 today, and a break under
1100 would give a stronger signal that further weakness is likely.

I have also mentioned that shorter term cycles ranging out to 15
weeks suggest a bottom in early February. Never bet the farm on
cycles, but keep them firmly in view. The pattern since late 10/09
has been to jump on even the slightest hint of an oversold. The
current one, as mild as it is, is the deepest since late October, so if
the boyz do not come piling back in on the long side pronto, we may
have picked up a pointer.

By my discipline, the "500" would get interesting below 1095.
So, I plan to keep an eye on the action over the next week or so.

SP 500 chart.