Market Monitor Update, Tuesday, 04/14/2009 01:34:53 PM EDT
by Keene H. Little
HAVING TROUBLE PRINTING?
SPX has dropped below a little shelf of support near 845 which was the high on April 2nd and the pullback lows on Thursday and Monday. That's the first chink in the bulls armor. But until SPX can break below 837, and stay below, today's pullback fits as just a correction so far. Two equal legs down from yesterday's high is at 837.75 which would take it down to the uptrend line from March and the broken downtrend line from November, shown on the 60-min chart.
SPX 60-min chart:
If SPX drops down to those trend lines, and if it looks like support will hold, it could be a good buying opportunity for another leg up shown in green. The upside target would be 880, potentially by late Thursday or Friday. A break below 837 would likely target gap closure from last Thursday at 825. Below that would strongly suggest the deeper pullback is already underway.