-->aus fremder Feder heute erhalten:
(meine Analyse ist noch nicht soweit)

Price reference last newsletter 841)

In “chart 1, panel 1” we observe that the decline in March stopped again on the weekly Bollinger support line. The large consolidation since last July is unfolding right near the global 50% Fibonacci retracement and takes more and more the shape of a triangle (outlined in “chart 2, panel 1”). The crucial question is whether this formation will break to the downside to approach level near 600 or if a break of about 950 will open the gate for about 1’125 (width of triangle added to breakout point to measure potential objective).

When we consider very oversold long-term oscillators (see preceding updates) it is hard to imagine that a break will occur on the downside. On the other hand, the downtrend is currently still clearly intact and being defined by falling moving averages (visible in “chart 2, panel 1”) and a trend-indicative lower- low, lower- high sequence (with key resistance at 950) labelled with letters A-E in “chart 1, panel 1”. Further more, we draw your attention to the oscillator in “chart 2, panel 2” that just reached the overbought territory. Since the start of the ongoing downtrend in early 2001 such kind of readings usually were indicating selling opportunities (see vertical lines). However, in the case of a trend reversal such an observation would not be very reliable anymore.

Conclusion:
Due to the very oversold oscillator in the monthly aggregates and the high correlation to the EuroStoxx50-scenario it is likelier that the current triangular formation will be a terminating pattern. Therein, we have a preference for a short-term exhaustion near 900, followed by a final downleg to approx. 800. Given the wide range of the triangle’s trigger points (950 upper line, 800 lower line) one might implement the following strategy: Accumulate the S&P 500 on a scale down basis between current levels till 800 and set an exit point at 770. An alternative direct break of the 950 triangle top line would imminently open the way for 1’125

Gruss