S&P 500 Index - SPX Breakout Says Market Timer Frank Kollar
August 29, 2008 (FinancialWire) (By Frank Kollar)
Since closing at 1305.32 on August 11, the S&P 500 Index – SPX has been reaching a series of lower highs on each attempt at a rally. It has also declined twice to around 1266 and reversed back to the upside.
On a daily chart this creates a pennant formation with a declining trend resistance line joining the highs at the top and a horizontal trend support line at the bottom. Typically, a break of either the support line or resistance line of the pennant is followed by a continued move in the direction of the break.
On Wednesday, August 28, the SPX made a decisive close above the declining trend resistance line, forecasting higher highs ahead for the short term.
There are several more resistance levels ahead for the SPX, including the 200-day moving average that many traders see as the defining line between a bull market and a bear market. Also, the Nasdaq did not equally participate in this rally, reaching only the 50% retracement of its August declines.
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.
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.
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