Is The Bottom In For The S&P 500 Index (SPX)? Asks Market Timer Frank Kollar

March 14, 2008 (FinancialWire) (By Frank Kollar)

The S&P 500 Index – SPX declined to within a fraction of its January panic lows on Monday, March 10, only to reverse and move higher in spectacular fashion the following day.

Is the bottom in for this decline?

While it is possible a bottom is in for the S&P, there are concerns. The panic lows in January where classic bottoms, but those bottoms where achieved with intra-day lows around SPX 1270. The closing lows in January were at SPX 1310.

In the current declines, the closing lows are down at SPX 1273. That is above the earlier intra-day lows, but if comparing apples to apples, the current decline is has closed well “below” the January lows and is a bearish indicator for future weeks.

Of course the stock market reacted like the bottom is in. Tuesday’s super rally occurred on 9 to 1 up volume vs. down volume, a measure that typically defines a bottom.

The CBOE market Volatility Index – VIX, a good measure of fear in the markets, reached 37.57 in the January sell off. In Monday’s test of the bottom, it only reached 29.73.

Lastly, the Nasdaq declined well below the January lows in both intra-day trading and in closing trades. So the Nasdaq is forecasting continued declines, while the S&P is bullish? Something does not add up.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.