Wednesday, August 09, 2006
Here is an hourly chart of the September S&P e-mini futures. I last commented on this chart yesterday.
As you can see the market rallied from 1272 support late yesterday and early today, getting as high as 1288.25. The subsequent break has carried it back to support and the drop from 1288 now looks like the third phase of a three phase correction. My best guess is that the correction will end near the 1263 level.
The second chart you see above this post shows the daily count of the number of issues which advance on the New York Stock Exchange (black line) and the 10 day moving average of this number (red line). I last commented on this indicator here.
You can see that the daily count of the number of advancing issues has moved up both yesterday and today (so far) despite the reactionary tendency in the S&P both days. Morover, the 10 day moving average appears ready to establish its third consecutive higher low. I think this is a hint that higher prices lay ahead. I think the market will rally to 1309 once it established a low near 1263.