• What am I missing?

    by  • October 24, 2012 1:53 pm • Broad Market Analysis • 0 Comments

    After yesterday’s plunge, I have seen many with a bearish view discuss the break of trendline support, specifically on the S&P 500 Index (SPX).  One vulnerability to chart reading is if you have a bearish or bullish predisposition, you can make the interpretation of that chart fit your view.  I have had a bullish view for months, although I called for choppy price action a few weeks ago.  That said, my chart work tells me to “stay pat” with my bullish view, and one of the factors is that major indices, such as the S&P 500 Index (SPX), S&P MidCap 400 (MID) and Russell 2000 Index (RUT) remain above trendline support.  I discussed the MID in detail yesterday real time as it was testing support.  Perhaps my time frame is different than those intepreting the charts bearishly, and I am open to the fact that the technical backdrop could change unfavorably for me.  But for now, I don’t see a breakdown that some technicians are referring to.  See the charts below.

    SPX – Trendline Support just below 1,400; MID around 970; RUT around 810

    About

    Todd Salamone is a graduate of The Ohio State University. As Senior Vice President of Research, he oversees the strategies and analysis used in supporting Schaeffer’s various option recommendation services. He is the author of the company’s weekly e-newsletter, Monday Morning Outlook, and a contributor to Bernie Schaeffer’s SENTIMENT magazine. With more than 18 years of trading experience at his command, Todd manages numerous alert services for Schaeffer’s, and has introduced many sentiment-based indicators to its subscribers. Todd has presented option strategies to retail investors in cities throughout the U.S., and is a frequent commentator on financial markets via print, radio and television, including CNBC, The Wall Street Journal, and MarketWatch.

    http://www.schaeffersresearch.com/

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