Potential Bottom Near for S&P 500 Index (SPX) Says Market Timer Frank Kollar

October 3, 2008 (FinancialWire) (By Frank Kollar)

Although the stock market is declining as if there is no bottom in sight, with selling escalating even though it appears the bailout bill will be passed by the House on Friday, October 3; there is a potential bottom in sight.

For weeks we have been watching the 1084 level for the S&P 500 index (SPX) as a likely target for this decline. For awhile, it seemed so far below that we could not possibly get there, but now we are only a few percent away.

Two important support levels come together at SPX 1084. One is the 61.8% retracement of the entire advance since the 2002 bear market lows. The second is the correction lows reached in 2004 (just below at SPX 1063).

The combination of two strong support levels coming together means there is a good chance of a bottom being reached or at least a tradable rally. Watch for a bullish reversal day, on high volume near this support level, to mark a bottom.

Note that we do not try to second guess the charts. Should the SPX make a decisive close below 1084, it will void this forecast.

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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