Market Analysis 10/09/11 - unitedfinancialplanner.com

The market indexes had another tough week last week.  Listening to the news, both political and business, nationally and internationally can make the market direction difficult to predict.

Monthly Chart of the S&P 500

Looking at the monthly S&P500 chart filters out some of the noise and the direction becomes much clearer.

1. It is clear that we had two prior highs in 2000 and 2007 and the most recent high in 2011.
2. It is clear that we are moving is a general downward direction with 750 as a target price range.
3. The closing price of the S&P500 has already crossed the 21 and 50 moving average.
4. The 21 period moving average has turned down while the 50 and 200 continue to in their upward trend
5. The index is at the 200 moving average and moving through this is a pyschological resistance.  Movement below this could signal a strong continued move to the downside is in store for the market.

Weekly Chart of the S&P 500

The weekly chart does dispute the monthly chart or provide any additional insight at this time. 

The chart is resisting at the 200 period average on this chart.

A slight move downward this week will turn all three moving average in a downward and negative trend.

Daily Chart of the S&P 500

 The daily chart of the S&P 500 shows a clear downward channel.  The close on Friday marks the high of the channel and a normal action now is one of the following:

• Continue to move up and break out of the downward channel
• Move down with the bottom resistance line as the short term target.

A downward channel is a bullish stock formation and is frequently resolved to the down side.

Summary of the S&P 500 Index

The long term diection of the index based on the weekly and monthly is down.

The daily chart has been on a short term up trend for a few days and has reached the upper channel of resistance in the overall downward channel.

Lets see what happens in the market today.  Please give us your comments.