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Frank started market timing in 1982 when the Federal Reserve cut interest rates and sparked the 1980’s bull rally. Realizing that this rally could have been forecasted, he began to search for indicators which had similar forecasting ability. Within a year, his first newsletter was launched,... More
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  • Overbought Rally at Strong Resistance 4 comments
    Sep 9, 2010 4:58 PM | about stocks: SPY, SPY

    September 10, 2010

    Both the S&P 500 Index (SPX) and it’s tracking ETF the S&P Deposit Receipts (NYSE: SPY) have moved higher over the past two weeks, but there is strong resistance ahead and the markets are very overbought.

    Since June there have been three attempts by the SPX and SPY to break out of the correction declines and start an advance. The first two failed at the SPX 1120 and SPY 112 levels.

    On Thursday September 9, the SPX rallied to 1110.27 and the SPY rallied to 111.68 before reversing. Both closed higher, but with reduced gains for the day.

    The SPX 1110-1120 level and SPX 112-113 level are again just above and must be decisively surpassed in order to sustain a new advance. It remains to be seen if this can happen.

    A wedge or pennant pattern is developing on the daily charts. This is created by drawing a line through the closing highs of the August and current rally and extending the line to the right of the chart. Do the same for the closing lows of the early July and late August declines.

    This creates the pennant pattern and typically when such patterns are broken, they determine the direction for weeks to months to come.

    Pennant patterns usually break in the direction of the prior major move, and that was the May - June decline. So the odds favor a break to the downside and lower lows ahead.

    The stock market can fool anyone at any time, but the patterns we see do look ominous.

    The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy has a position in the S&P 500 SPDRs.



    Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy has a position in the S&P 500 SPDRs.
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Comments (4)
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  • More than a half of S&P 500 members have an overbought daily Lane's Stochastic and almost a half has an overbought daily Williams' Percentage Range.

     

    More than 10% of S&P 500 index members made a new 52-week high, but almost a half of them closed this week below the previous week’s close. This event is called a “buying climax”.

     

    All above technical indicators are bearish.

     

    www.thegreedytrader.co...
    12 Sep 2010, 05:01 PM Reply Like
  • Author’s reply » Yup. Thanks!
    13 Sep 2010, 07:52 AM Reply Like
  • Given your constant attempts to market a fibtimer subscription to me, I thought I'd check back on the success of some of your market timing calls... I guess this wasn't one of your better ones..no?
    31 Jan 2012, 12:09 PM Reply Like
  • Author’s reply » We do not attempt to make any forecasts for the market here. Only short term analses of individual stocks and ETFs, usually with suggested stops.
    2 Feb 2012, 04:12 PM Reply Like
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