Tuesday's Fireworks Were Basically Meaningless

Tuesday’s fireworks were dramatic and exciting but in the big picture were pretty meaningless if one is looking for the start of the next bull market.

A quick glance at the Point and Figure charts of the three major indexes tells the story:

The big picture has not changed because all three indexes are still in obvious and significant downtrends and it’s not a coincidence that all three major indexes were stopped at significant points of resistance on their respective Point and Figure charts.

A “low pole reversal” is a Point and Figure alert that means that demand has reentered the market and that the oversupply that was causing prices to decline is drying up.

But all three indexes currently face stiff resistance in their attempts to climb higher and a breakout above current levels will be required to indicate that possibly a new up leg has begun.

And focusing on the S&P 500 in particular since it is widely regarded as a proxy for the US stock market, one can see on the chart that significant upside resistance rests at the 745-750 level, just 3.6% from Tuesday’s close.

So, the battle is on; is there enough upward push to break through these significant levels or will we find ourselves drifting back down to the 670 level on the S&P and 6500 level on the Dow? I don’t have a crystal ball, but unless we see a significant and sustained breakout, the technical indicators point to the path of least resistance remaining to the downside. Stay tuned.

Comments

[R. Ennis:]

Meaningless like this post?

Mar 11 08:25 AM

[kelm:]

This is worthless. You insult everyone who takes the time to read this by the obvious lack of time you put into creating it.

Mar 11 09:17 AM

[John Lounsbury:]

John Nyaradi - - -

The title indicated to me that I would see some discussion of a subject that is quite fertile. Instead all I see is a nice P&F chart. I take it that your point is that no break-out has yet occurred? You could at least say that.

The topic and the chart deserve at least a paragraph of discussion. I am very surprised that the SA editors did not request that before publishing.

Mar 11 09:22 AM

[John Nyaradi:]

Only a part of this article was published. I have contacted the moderator.
John Nyaradi

Mar 11 09:26 AM

[throkmorton:]

another pundit.......go crawl back into your hole..

Mar 11 09:27 AM

[throkmorton:]

another pundit....... go crawl back into your hole.....

Mar 11 09:30 AM

[throkmorton:]

guess you deserve 2 comments

Mar 11 09:32 AM

[peterthepai...:]

wow!...cool it guys...

lets see the rest of the article?... yeah...

Mar 11 09:53 AM

[momomiester:]

I think your just grumpy cause your fingers are tired typing out all those "X" and "O"...Of course one rally is useless. It has to be confirmed later by a follow through rally but hey it is better than going straight down.

Mar 11 11:59 AM

[LJR:]

Useful information - thank you very much! As I read the Citibank news based on the memo, and saw the sharp rise, I thought it all hogwash - the bear market is still intact!

What I can't understand is all the rude comments above - don't let it bother you, Mr. Nayradi - it too is hogwash!

Mar 11 01:37 PM

[John Lounsbury:]

John Nyaradi - - -

I should have offered an inadvertently truncated article (by SA) as a possibility in my previous comment. I apologize for assuming you were to blame.

Mar 11 02:06 PM

[NeoAtriedes:]

I think the article is simple and to the point. Obviously some people don't understand point and figure.

Mar 11 04:33 PM

[John Nyaradi:]

Thanks, John


On Mar 11 02:06 PM John Lounsbury wrote:

> John Nyaradi - - -
>
> I should have offered an inadvertently truncated article (by SA)
> as a possibility in my previous comment. I apologize for assuming
> you were to blame.

Mar 11 04:45 PM