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ON THE MARKET - Santa? Declining Tops Resistance Still Rules Charts

Friday 12-9-2011


Dr. John L. Faessel


Commentary and Insights


Quote of the day

“Central planning, judicial activism and the nanny state all presume vastly more knowledge than any elite have ever possessed.”

 ~ Thomas Sowell ~




Declining Tops Resistance Still Rules Charts


Stock Market in Constructive Pullback


EuroLand Bond Yields Continue Precipitous Retreat

Italy 10-year (gross) bond yield – 6.48% off from 7.26% on 11-24

Spanish 10-year (generic) bond yield – 5.77% - off from 6.7% on 11/24


The McClellan Oscillator is in NEUTRAL @ minus 61

Yesterday the stock market tumbled on increasing and average volume as worries over Europe again took center stage. The S&P 500 (SPX) was off 2.1%.


Price closed right about on its lows yesterday that put it at six-day lows. Price also hovers just above a significant trading void where there is little price support down to (SPX) 1197 / 94.


So far, pullback appears constructive.


Interesting is that the 2.1% pullback occurred after the McClellan Oscillator had posted back-to-back narrow range days of a neutral and plus 65 and 62 that are usually prescient of a 2% move.


I said on Tuesday that, “From a technical perspective the key declining Tops line resistance at (SPX) 1270 that comes off last July's top tick will be the overriding wall of resistance. The 200-day moving average that comes in at (SPX) 1264 is likewise formidable. The McClellan Oscillator is in neutral at plus 77 so there is "room" before we reach any overboughtness considerations. European headlines will continue to tweak the daily or hourly trade.”


Today the University of Michigan consumer sentiment index for December will be released along with October's trade balance. No notable companies are reporting earnings. Euro bond prices should continue to rule the trade.



The (SPX) closed yesterday at 1234.35



S&P 500 (SPX) - Short term price support is at 1231

Then at 1244 and 1240 and 1233

The 50- moving average support is at (SPX) 1217.

(SPX) support at the August 8th lows is at 1101.

Support at the October 4th lows is at 1074.



Key “declining tops” resistance is at (SPX) 1268

The 200-day moving average resistance is at 1263.

Short term price resistance is at S&P 500 (SPX) 1247  

More formidable price resistance is at (SPX) 1267

Price resistance at the top- tick of the near four month old consolidation is at 1292 then at 1277.


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