S&P 500 Index (SPX) Reverses from Support Says Market Timer Frank Kollar

January 16, 2009 (FinancialWire) (By Frank Kollar)

The S&P 500 Index – SPX declined right to its critical Fib 61.8% support level on Thursday, at SPX 821, before reversing higher and closing with a slight gain.

Last week we said the stock market was ready for profit-taking, but the extent of the selling was greater than we were looking for.

Reversing right at support is a bullish sign, but the rally did not continue far before it ran out of steam. The close was only fractionally higher. The Nasdaq indexes did not reach their critical support levels and this is a worry.

The Dow Jones Industrials (DJIA) reached 8000 in the minutes before the market reversed higher, another reason for the rally, but the DJIA also struggled to make it to positive territory before the close.

Lastly, the CBOE Market Volatility Index (CBOE) closed above its upper Bollinger Band. For those who follow this indicator, it is a bullish signal.

The market is extremely fragile here. The rally on Thursday was not strong enough to convince investors to jump back in, we do not think.

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.

Go to previous Press Releases & Trading Notes.