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Vision Capital M.
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With more than 10 years of interest and experience in financial markets, I dare to say I have learned that the obvious is not always true and the multitude is often wrong. Still the markets always tend to provide hints and directions. Learning to listen, see and act happens to be the hardest... More
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Education in Finance and Trading
  • US stock market (S&P 500) technical analysis - daily, 18052010 0 comments
    May 19, 2010 8:52 AM | about stocks: SPY

    Today the US Consumer Price Index (NYSEARCA:CPI) level was announced. The consensus figures were 0.1 (MoM) and 2.4 (YoY) and they were missed a bit. The actual CPI reported is -0.1 (MoM) and 2.2 (YoY). Excluding the food and energy, the CPI stands at 0.0 (MoM) and 0.9 (YoY). This figures show that still the American economy is not generating much of a inflationary pressure and the highest part of the inflation came from the energy prices. This would have at least two implications - the FED is free to leave the interest rate at its lowest level and another stimulus of money could not happen to be so pro-inflationary.

    Earlier in the day the Construction Output in the European Monetary Union (EMU) was declared to be 7.6% while for the previous period it was -7.2%.

    But let's see the graphs.

    SPX Daily graph

    The daily graph of S&P 500 shows that the market is getting close to an oversold area. What is more interesting is to see if it will be a bullish divergence formed on the graph. Still the general direction is down and a test of the 1093 area is possible.


    SPX 1hour graph

    What is more interesting is the bullish divergence that is already formed on the 1 hour graph of S&P 500 which could signal an upward movement for today at least to 1120/25 area. If that gets broken, the market could go higher to around 1140.

    Disclosure: No positions
    Stocks: SPY
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