Market Monitor Update, Thursday, 04/09/2009 11:49:02 AM EDT
by Keene H. Little
HAVING TROUBLE PRINTING?
Keeping the bigger picture in mind, a daily chart of SPX shows price is stalling at the downtrend line from November. I also have a horizontal line near 845 which has been a level that price has oscillated about since the October lows. If the bulls can push it higher into early next week SPX should be able to make it up to the 870-875 level. The rising wedge pattern is a real possibility at this point, especially considering the loss of momentum in the oscillators and the break of the uptrend line on RSI. If this rising wedge pattern is correct I suspect the dark red wave count will be the right one. It takes a push above 870, that holds above, to prove the bulls are clearly in control and should then work the market higher into May (with an upside target of 995).
SPX daily chart:
While the key level to the downside is 790 (coinciding with the 50-dma) a break below Tuesday's low at 814.53 would be a bearish heads up that either a deeper pullback has started or more bearishly that the next leg down has started.