Saturday, October 22, 2011

Don't Trust Me Yet

Posted below are two charts. Both charts of the SP-500, yet on different time frames, and their respective moving averages reflecting each chart's respective time frames. The first chart displays the daily SP-500. I will dissect that first. We have been performing very nicely, but I believe that the biggest test is yet to come at the 1260 level. It is a HUUUGGGGEEE battle zone with a confluence of some unbelievably important points of resistance: 200 day SMA, historical head and shoulders reversal neckline, former massive support and resistance, down trendline from the highs of the year, and broken uptrend from the 2010 lows. This is at the 1260 level.

Now check this out. This level corresponds to the 13 period SMA on the monthly, coming in at about 1265. The points that are circled on the monthly charts with the 13SMA (second chart) shows what happened each time we broke below the 13SMA for the month ever since we broke out from accumulation in 1994 on the SP-500. Allow me to point this out:When we broke below the 13SMA on the monthly, the only times we fought off a massive decline is if we managed to close back above the 13SMA within three months. If we did not close back above the13SMA monthly within three months after we broke below it, we declined at least 350-500 more SP-500 points.And if we managed to continue a massive bull run and recapture the13SMA, we got back above the 13SMA within three months. We are in October, we broke below the 13SMA in August.If you arent counting,yes, this is the third month that we are below the 13SMA. And it comes in at those same massive reference points which I highlighted in the first paragraph and on the daily charts. And, odds are, these final few trading days in October are make or break it time.Here are the charts


  1. Hey man! You need to change the font here, my old man eyes cannot deal with the letters. Great chart work!

  2. thanks bro im trying to figure out how though lol

  3. Better! No worries, bro it will come together.