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Keene Little : 3/9/2008 11:30:21 PM

Monday's pivot tables: Link and Link

The short term picture, looking at the SPX 10-min chart, shows we're in a down-channel since last Wednesday's high: Link . Price stopped at the top of the channel (the downtrend line from Wednesday) Friday afternoon and then pulled back and found support just before the close at the mid line of the channel.

If the bulls can rally the market right away Monday morning I show two equal legs up would take it to 1310. That would also give SPX a bounce into the 38%-50% retracement zone of the leg down from Wednesday. The 60-min chart also shows a parallel down-channel for price action since the Feb 27th high: Link

Friday afternoon's rally stopped at the mid line of its down-channel so SPX needs to rally above 1300 to at least break into the top half of the channel (and break its shorter term downtrend line shown on the 10-min chart). Then the bulls will need to break the downtrend line from Feb 27th, currently near 1318, in order to get this market turned back around.

In the meantime the trend is down and therefore look for bounce failures to short. Keep in mind that the bearish wave count here (whether we get a small bounce first or not) is very bearish and calls for some very hard selling in the coming week. The important level for the bulls to break is last Wednesday's high near 1344. That would at least give the market a breather and put us into a potentially larger sideways pattern.

OI Technical Staff : 3/9/2008 10:59:59 PM

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