S&P 500 Correction - March 14, 2011 unitedfinancialplanner.com

The S&P 500 appears to have broken the upward channel that has been in place since September 2010.

The next point of resistance for the S&P 500 is 1,275.

S&P 500 Channel Break Out To The Downside

The S&P 500 penetrated the lower channel of the recent upward channel with a gap down on very strong volume.

The index also pentrated the the 200 moving average and closed below 1,200.  The next 3 trading sessions will probably test the recent move to confirm that the channel is broken and we are in for a correction.

VIX - Breakout to Upside - March 11, 2011

During out last post on the VIX we said the chart has a symetical triangle pattern and it could break out to either direction. 

Yesterday the VIX broke out to the upside indicating increased volatility in the market.

Market Turning - March 10, 2011 - unitedfinancialplanner.com

The DJIA closed near the daily low and below the resistance level of 12,000.

The S&P 500 closed below 1,300 and near the daily low on strong volume.

These moves are very bullish.  Lets see if the market follows this trend on Friday.

Technical Analysis - Volatility - unitedfinancialplanner.com

The VIX, or CBOE Market Volatility Index, made a lower high and higher low yesterday, March 8, and is created a symmetrical triangle.  These triangles can resolve to either the upside or downside but can tend to resolve to the current direction.  In this case the current trend of the VIX is up.  Below is a static view of the VIX as of market close on March 08.

Technical Analysis - March 08 2011 - unitedfinancialplanner.com

The S&P 500 is broke through the lower support line of this now long running upward channel.

The recent highs of this index did not come close to the upper support line of the channel. 

The recent down days have also had above volume.

These are all indications of a tired bull run.  Further pentration of the downward support line and a close below with strong volume will be a strong technical indication we are going into some type of correction.

All the politics and price of oil have not played out yet, creating more uncertainity for the market.

S&P 500 - Up Channel is not Broken

The S&P500 managed an up day on Friday, the 25th, after a DOJI close on Thursday.

This means we have not broken the up channel at this time.

We are currently sitting at the 50 moving average.

VIX - Volatility Resisted and Declining

The VIX has resisted the moving average and has declined for the last two trading sessions.

The next resistance will be the 50 and 200 day moving average, which have crossed and pointing up at this time.

S&P 500 - Resistance on Lower Band of Upward Channel - unitedfinancialplanner.com

The S&P 500 has completed its steep drop to the lower band of the current upward channel yesterday with the market showing some resistance.

We also managed to close above 1,300 after dropping below on intraday trading.

The S&P 500 penetrated the lower band and closed with a DOJI candlestick pattern.  Doji close normally indicates uncertainty, void of strong convistion.

The question now is whether we will hold at these levels or drop below the channel.

Volatility - VIX - Resistance on Feb 25 - unitedfinancialplanner.com

The VIX showed resistance to the moving average on Thursday, February 25 and ended the day with a “dark cloud” candlestick formation indicating we could see a reversal in the VIX.

The hope in the market yesterday is that the oil prices will stay at or below $100.  The discussion is whether the Lybia oil fields that are coming off line represent 400,000 barrels a day or 1.2 million.

The Saudi’s said they will make up any shortfall while enjoying the higher prices.