Saturday, March 3, 2012

S&P 500 - Triple Screen Analysis - Week: 27 Feb to 02 Mar '2012 - Flirting with last year's High

Recap: The SP500 was hovering around last year's high when we discussed it last (post here). The index has closed above last year's high just once on EOD basis, in last week's action. Currently below these highs, one looks for direction from these oversold levels.

S&P 500 - End of Month Chart - 02 March 2012
S&P 500 End of Month Chart (EOM) : As we move into March, the EOM chart above, shows us a flat line at its tip. The 5 EMA has decisively moved above the 13 SMA, indicating long term Bull strength. One can study past action of these moving averages by looking at the earlier crossovers in the chart. A re-look at the following studies (which we first studied here) will put things in proper perspective.

S&P 500 - End of Week Chart - 02 March 2012
S&P 500 End of Week Chart (EOW): The weekly channels are in white - across the colored monthly channel lines. The SP500 continues its climb using the middle channel line as resistance. Support for last week was the 5 EMA on the EOW Charts. 

S&P 500 - End of Day Chart - 02 March  2012
S&P 500 End of Day Chart (EOD): The re-aligned Day channel lines are in yellow and are inclined at the same angle as the Weekly channel lines. One can see from the last 5 candles that most of last week's action was in a tight range. SP500 has closed the week a tad below the 5 EMA on the EOD - Bulls however, are still in control.

Looking Forward: The divergences seen last week only resulted in some ranging  - the Bulls retain strength - Bears would look at keeping the price on the EOD below the 5 EMA. Bulls should be happy to remain in the current channel - on the EOD chart. Incidentally the last two candles on the EOD chart forms a 'Bearish Harami' (studied here earlier). However this rather weak 'bearish pattern' does not make it 'Advantage Bears' yet...