Tuesday, November 24, 2009 at 12:52PM | Asher Pinto
Take a look at the weekly chart of the S&P-500, specifically the Bollinger Bands...
S&P-500 Weekly: Tightening Bollinger Bands
Do you notice how the Bollinger Bands are tightening. Look at how the upper band has started to bend inwards and is falling heavily on price action?
Now, it is only the middle of this week. So, if there is some upside action over the rest of the week, which is a holiday shortened one, there is the possibility that the band could be pushed out of the way by the rising prices. But if the index closes Friday at these levels or lower, watch out! This is a recipe of disaster. At the very least, a move to the 20wMA (1040) will be called for and, if that level then breaks, a move to the lower band (currently at 955 and rising) will be on the cards.
So keep an eye on the weekly close of SPX. The bulls will want to ensure that there is a much higher closing than the current 1100 or so (preferably above 1125-1130). The bears will want the index to close the week at or below 1100.
« Another Sign Of Danger for the Bulls »
Take a look at the weekly chart of the S&P-500, specifically the Bollinger Bands...
Do you notice how the Bollinger Bands are tightening. Look at how the upper band has started to bend inwards and is falling heavily on price action?
Now, it is only the middle of this week. So, if there is some upside action over the rest of the week, which is a holiday shortened one, there is the possibility that the band could be pushed out of the way by the rising prices. But if the index closes Friday at these levels or lower, watch out! This is a recipe of disaster. At the very least, a move to the 20wMA (1040) will be called for and, if that level then breaks, a move to the lower band (currently at 955 and rising) will be on the cards.
So keep an eye on the weekly close of SPX. The bulls will want to ensure that there is a much higher closing than the current 1100 or so (preferably above 1125-1130). The bears will want the index to close the week at or below 1100.