S & P 500 Chart, Technical Analysis

S&P 500 Archive-February
Archive of S&P 500 comments, January.

[adbox-upper.htm]

Inching Toward The Low(2/28/01)
Like the Dow and Nasty, the SPX is inching toward its 10 week cycle low due within the next ten days. Yesterday's comments are still pertinent. In addition that projected low of 1200 coincides with the SPX's lower channel trend line. So prepare for a pretty good bounce, and consider covering your shorts on weakness.

Mixed Breed (2/27/01)
The SPX acts like the Nasty one day and the Dowager the next. Tuesday, it was a little of both.

Don' expect much excitement in this index over the next few weeks. The downside objective for the 10 week cycle low continues to project to around 1200, with an upside projection of 1280 on the hourly charts. The SPX got to near 1273 Tuesday.

The selloff wasn't too bad in this index, and the hourly charts indicate there is still some residual upward momentum that could lead to a weak retest of the high. The index should gradually work its way lower into the ten week cycle low due around March 9.

Dr. Stool hates to be repetitious, but it bears repeating. The low will look like a successful test of the bottom, and the bulls will be foaming at the mouth. Just remember, it'll be good for a trade. And that's all.

Mixed Breed (2/27/01)
The SPX acts like the Nasty one day and the Dowager the next. Tuesday, it was a little of both.

Return to the Neckline (2/26/01)

When an index breaks down from a major top formation, typically there's an immediate recoil to the point of breakdown. The top formation on the S&P is so big, time wise, that you need to look at the weekly chart for perspective. The rally appears to be a classic reaction, that will carry into a congestion area and overhead supply in the 1275-1300 area.

The rally succeeded turning the slope of short term moving averages on the daily charts to pull the downside objective up to 1225 from 1210 the day before. The bounce is enough to almost, but not quite turn daily oscillators positive.

On the hourly charts, the upside objective for the eight day cycle is 1280. Once that's reached, the final down segment of the 10 week cycle will probably take prices back to a test of the lows heading into the second week of March. The SPX should rally again from there, causing the majority to again proclaim a bottom as a result of the "successful" test. Such thinking will prove fatal, as intermediate cycles will be headed into a hard down phase, which will take the market to new lows later in the spring.

1140? (2/24/01)
Or 1210? The centered moving average projections on the daily charts point to a low of 1140 for the 10 week cycle. The hourlies point to 1210 for an eight day cycle bottom.

What we saw Friday at 1215.44 was probably the eight day cycle low. But we're only 40 days along on the 10 week cycle, and according to spectral analysis work done by Market Cycles, that wave has been averaging 52.3 days over the past two years.

So it seems a little early for a low on that cycle. With the downward adjustment on the price objective resulting from the SPX failing to get positive on Friday, let's look for a low near 1140 in a week or two.

If you're short, beware of the Fed dropping another turd before that. If it comes early next week, the knee jerk rally should be followed by a vicious selloff. If the Fed can hold it in for a week or two, they would be dumping it on us around the time the cycle low is due. A rally from there would probably stick for a few weeks.

Holding a Bottom (2/22/01)
In a manner of speaking, yes. After yesterday's churning, downside objectives for the eight day and 10 week cycles adjusted down to 1235, which the index reached intraday, before bouncing back to key chart "support".

The timing is clearly supportive for a 6-10 week cycle low, and the psychology is certainly negative enough. Dr. Stool suspects that after another probe down the chute, the bottom pickers and short coverers will step in to "save the day." And they'll look like heroes for a week or two before the next killer wave.

Completing the Top (2/21/01)
The SPX is on the verge of breaking down from one of the most enormous freaking distributional top patterns Dr. Stool has ever seen. It makes 72-73 look like a Sunday School picnic. You must look at the weekly chart also to understand the implications of this. A break of this neckline at 1250 projects to an ultimate low of 950.

The trick is that it might not happen today, and if it does, it will probably snap back quickly. The 10 week cycle low is due, the short term price objective of 1250 is virtually in hand, and stochastics are stretched. True, the bungee cord could break, but probability says that the index should bounce and pause soon, before heading for its ultimate destination somewhere below 1000.

Pretty Good Guess? (2/20/01)
Dr. Stool is wondering whether his guess that the S&P would head for 1250-1270 before bouncing was too conservative. Probably not. While the market is headed lower, much lower, over the long haul, it still looks like the downside should be nearly spent in the short run. Look for a probe to or through 1250, before a snapback rally.

Dr. Stool is wondering if this may be one of those historic occasions when things go from horrible to horrendous? Well, he doesn't know, but it sure feels that way. He's thinking that, under normal circumstances, with the market extended to the downside as it is, and at a key support level, the shorts will begin to cover on a breakdown through 1250. That would result in a reversal day, which all the silly bulls will proclaim to be the bottom.

But what if 1250 breaks, and there's no bungee cord attached. Instead of the snapback short covering rally, things could really get interesting. So do you cover your short at the first sign the dump is over, or hang on just in case this is 1987 all over again. 'Cause if it is, you may not get to put that short position back on.

Dr. Stool will have to leave that, as always, up to you.

Looking For A Bottom?(2/17/01)
Of course, aren't they always. Stock Proctology indicates that we're getting close to something that is going to look like a bottom to the uninitiated. "Oversold" indicators, major support, round number, yadda, yadda.

The 1295 price objective has been met. There could be a stab down to 1270 or so. That's an area where long term support tend lines begin to come in - somewhere between there and 1250. That's definitely going to get the hope mongers going again. They'll probably get some help from the Fed, being the good chart watchers that they are over there.

So we'll get down to 1250-1270. The Fed will cut again. The shorts will cover like mad. The bottom pickers will pick like crazy, in public yet, and the market will spike up for a few days from that low. It won't get far. Just another trap for da bulls.

The Straight Scoop (2/15/01)
If you want the real story of the market, don't look at the Dowager or the Nasty. They're all smoke and mirrors. The real story is here in the SPX.

The last four days look like a midpoint consolidation in this decline. We got our bounce from 1305. Intraday oscillators signaled that the rally ended as the index made its second stab at 1332 Thursday afternoon. The downside objective of 1295 for the current 6-10 week cycle remains in sight.

Not Straight Down (2/14/01)
Very rarely do prices go straight down. This time is no exception. Although daily centered moving averages suggest a low of 1295 on the 6-10 week cycles, intraday indications are for a bounce from around 1305, in the very near term. Don't let that fool you. Intermediate indicators are only now turning negative.

Second Leg (2/13/01)
The second leg of this bear market is under way. The S&P has broken down from a triangle consolidation pattern, made a classic return to the breakdown area, and has begun it's acceleration to the downside.

Short term stochastics are extended to the downside, but that could last for weeks in a bear trend. Intermediate stochastics are confirming a down phase that should last two months, at least. In the short run, intraday centered moving average behavior projects to a low of 1295, and the dailies project to 1250, which will set the bulls up for another sucker test.

Return to The Neckline (2/12/01)
This is a classic reaction rally to the neckline. The intraday objective is 1350. The daily indicators remain negative.

Triangle Breakdown (2/11/01)
The SPX broke down out of a two month triangle consolidation. Triangle breakouts usually result in big, fast moves. The triangle itself also has longer term measuring implications. The move from the top of the market to the bottom of the triangle was 280 points. The implied measurement is 280 points from the top of the triangle at 1383. That would indicate an intermediate downside of 1100. This squares with the measuring implication of the neckline break back in December at 1300, which points to a low of 1070.

In the very short run, based on intraday charts, there's a downside objective of 1295. The bulls will generate a bounce there and the talking heads will proclaim a bottom. Don't believe the bastards.

Shampoo (2/8/01)
The SPX ticked down through the neckline of a beautiful head and shoulders top, which began forming on January 22 on the hourly charts. All of the dailies are turning negative. So this little shelf at 1336 should fall of the wall real quick. When it does, the measuring objective becomes 1285 for a move that should last a couple of weeks.

AJ Sticks With 1650 (2/7/01)
Goldman trotted out AJ last night. She stuck with her forecast of a 1650 S&P. This really makes Dr. Stool mad as hell. But he's already said enough about that.

Ok, the charts, right. That's what we're all here for, no? Well, the SPX broke down out of a gorgeous head and shoulders on the hourly charts. It's also visible on the daily chart below, but you'll need a magnifier proctoscope to see it. So it's only significant for the very short run. Downside projection from the breakdown is 1305 or so.

Refreshed (2/6/01)
A 10 point bump by mid day was all the bulls could manage. Intraday hourly stochastics confirmed the failure with sell signals late in the day. The 10 week cycle down phase should begin to gather steam over the next few days.

Pause That Refreshes (2/5/01)
The S&P put in an 8 day cycle low Monday afternoon, off the 1345 support. The uptick should be short lived, and will set up a bigger down later in the week. Consider this a right shoulder.

Downhill Skiing (2/3/01)
The slopes were open Friday, and the skiing was good for bears, after four weeks of unseasonably warm weather. It was a fun day for one and all, except the bulls who stood motionless and mournful at the top of the slope.

Dr. Stool sees a base camp at 1340, where it may be necessary to take the lift back up the hill a little. After that bears should be in for a good run.

Oops, Lighter Went Out (2/1/01)
First Dr. Stool forgot to cut the end off the cigar. THEN, you light it. Looks like the bulls haven't shot their entire wad yet. So we'll revisit the highs, maybe a little more for the sake of excitement. Watch that 21 day stochastics oscillator for the sell signal that confirms this massacre is over for good.

Stepan N. Stool PH&D

Click symbol or name for expanded quote page

Market Overview

Select:

Quotes

Enter Symbol:

Quote Chart
Opinion Profile

StoolMart
A Great Name in Retailing
Books, Software, Underwear,
Accessories and
Fine China

NEW NAME, SAME GREAT PRODUCTS!

This book is a must for you Stooligans out there. The bible of cyclical analysis.
The book that started Dr. Stool on the road to ruin.