Keene Little : 4/27/2008 10:42:48 PM
Monday's pivot tables: Link
SPX may have finished its rally on Friday or it could have a little bit more left, either right away or after a small pullback on Monday morning. The choppy price pattern leaves the short term move questionable but it's facing some stiff trendline and price-level resistance in the 1396-1405 area. As shown on the 120-min chart, SPX is pushing up into this resistance zone with bearish divergences and I'm not feeling so bullish when I see this: Link
It takes a break above 1405 to get at least short term bullish but I've moved the key level to the upside up to 1440 (a few points above its 200-dma at 1436 and the trend line running across the March 24th and April 7th highs). Any rally above 1405 could literally stall at any time, including at the 50% retracement at 1423, so I'd be a nervous bull above 1405.
A break below its uptrend line from March 17th, currently down near 1360, would turn the price pattern more bearish. The daily chart shows how all this fits into the larger pattern and resistance levels: Link
The DOW's daily chart shows price right up against a slew of trend lines in the 12840-12950 area and Friday's candle is a potentially bearish hanging man at resistance (needs a down day on Monday to confirm the reversal signal): Link
Friday's closing price was right in the middle of the resistance zone at 12891. A rally above 13K would look a little more bullish but then it has its 200-dma at 13072 and that's the reason I've got the key level for the upside at 13100. But a break below its uptrend line near 12500 would be a bearish heads up that 12270 key level could be next.
The RUT has been the laggard lately and its daily chart shows the same potential bearish setup, including the hanging man candlestick at resistance: Link
. I see the possibility for a little higher to the February 1st high near 732 and any higher than that would be bullish but the bearish divergences on MACD as price presses up against resistance is a warning to bulls.
So Monday should be a telling day, as long as it doesn't go sideways and keep us guessing for a little while longer.