Monday, May 23, 2005

S&P Hourly Boxes

The chart above depicts my short term box analysis for the June S&P futures. In a previous post I said that the market should soon reach the top of the second box at 1197. As of Friday's close the market had rallied as far as 1192.70 and had been stalling near the 3/4 point of the box at 1190 for the better part of three days.

I am not a fortune teller so I can't say what the market's action today will be. But I do want to point out that the move up from the last low at 1147 to 1192.70 was 45.70 points, just a tad more that 1 1/2 the box size of 30 points. In my experience anytime a market moves a multiple or a multiple plus a half of the box size from an extreme and starts to stall it is likely to reverse course temporarily.

So now I think the market's next move of 10 or more points from Friday's close will be downward. A drop of half a box (15 points) from 1192.70 or from whatever high it reaches in the next couple of days would be normal. Keep in mind that the bigger trend is upward so if this break materializes it will present a buying opportunity.

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