Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

S&P 500 Technical Update: What Happened?


The best way to answer that question is by focusing on the charts and analyzing the technicals.

The past few days have been a good reminder of why we define our risk when actively investing. Lots of folks are asking what happened today. Well, the best way to answer that question is by focusing on the charts and analyzing the technicals.

What many people don't realize is that emotion/sentiment shows up everyday in charts. In fact, price movement is one of the best indicators/reflections of psychology. So what happened?

After breaking down in April, the S&P 500 (SPY) formed a double bottom at 1358 and accelerated higher into the month's end. This bounce was stealthly and bullish sentiment quickly returned, perhaps too quickly. The goodness flowed into Tuesday, mind you, "Turnaround Tuesday." The reversal that day was a strong warning. It occurred at 1415, right underneath the broken uptrend line. Yep, another failed backtest. In fact, this was the third failed backtest. This has led to another waterfall of selling down to the crucial 1370 support line (2011 highs and March breakout area).

With uncertainty over French and Greek elections, the market is likely to remain volatile. The ball is in the bears' court now. It's their game to lose near term.

Editor's Note: Andrew Nyquist is an independent investor based in the Minneapolis area. This article originally appeared on his investing and economics site, See It Market.

Twitter: @andrewnyquist
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos