Tuesday, November 16, 2010
Here is a daily bar chart of the cash S&P. The market has dropped from its recent top. But this average is still above its rising 200 day moving average (red line) and above its rising 50 day moving average (green line). In a bull market good buying opportunities typically arise when the market gets to or falls a little below a rising 50 day moving average. Right now this moving average is at 1165.
As you can see on my chart page my advancing issues oscillators are all in oversold conditions. This makes me think that the low of this correction will not be far from current levels (green oval). My best guess is that after a rally of 3 days or so the market will make lower correction lows but that the oscillators will diverge bullishly by not doing the same.
Once this correction is over I expect the S&P to resume its march to 1300.