The following is the stock market outlook, using the S&P 500, for the week of Nov 30, 2009 - Dec 4. This analysis can be used to help in day trading or swing trading decisions, as well as for investors to gain technical insight into the current market.
Events like which occurred on Wednesday, with Dubai World saying it would not be able to pay it's debt, are the type of events which will be the catalyst for this market going lower.
Technically this market rally is on shaky ground at these levels. We have divergence on multiple time frames, not to mention inter-market divergence (markets moving contrary to the general relationship). Divergence can last for a long time and is a not a trading signal in itself, but when news such as that of Dubai World is released, hardly ever does it come alone. There are still many systemic problems, and no matter how much money is thrown at a problem, traders and investors still get scared.
Right now the trend is still up, and should be traded as such, but be cautious. Support is Friday's low at 1084. A drop below that would punch us out of the range we were in. The target for that breakout is 1055 which is just above a hourly trending support line. There is important interim support which will provide us with other signals during the week. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action to reach 1055 if in fact this market does break lower.
The average weekly range for the S&P is just under 37 points, and the market closed on Friday right around 1091.
If the upcoming week brings rainbows and butterflies, here are the levels to watch on the upside: To move higher the first resistance point is a short term level at 1100. We also have resistance at 1105 followed by1108 and 1110. Beyond this are recent highs in the market, right around 1114. A break above that indicates another upswing. Volume should be rising if this occurs, but so far this market rise has not occurred on large volume, so look for volume to at least remain steady. A decline in volume on a breakout is likely to result in a failed signal.
Targets beyond 1114 are 1118, 1123, 1128 and 1131.
Trade with the trend, but don't become attached to it.
CFDs Analysis by CFDsPros - Written by Cory Mitchell, CMT
Events like which occurred on Wednesday, with Dubai World saying it would not be able to pay it's debt, are the type of events which will be the catalyst for this market going lower.
Technically this market rally is on shaky ground at these levels. We have divergence on multiple time frames, not to mention inter-market divergence (markets moving contrary to the general relationship). Divergence can last for a long time and is a not a trading signal in itself, but when news such as that of Dubai World is released, hardly ever does it come alone. There are still many systemic problems, and no matter how much money is thrown at a problem, traders and investors still get scared.
Right now the trend is still up, and should be traded as such, but be cautious. Support is Friday's low at 1084. A drop below that would punch us out of the range we were in. The target for that breakout is 1055 which is just above a hourly trending support line. There is important interim support which will provide us with other signals during the week. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action to reach 1055 if in fact this market does break lower.
The average weekly range for the S&P is just under 37 points, and the market closed on Friday right around 1091.
If the upcoming week brings rainbows and butterflies, here are the levels to watch on the upside: To move higher the first resistance point is a short term level at 1100. We also have resistance at 1105 followed by1108 and 1110. Beyond this are recent highs in the market, right around 1114. A break above that indicates another upswing. Volume should be rising if this occurs, but so far this market rise has not occurred on large volume, so look for volume to at least remain steady. A decline in volume on a breakout is likely to result in a failed signal.
Targets beyond 1114 are 1118, 1123, 1128 and 1131.
Trade with the trend, but don't become attached to it.
CFDs Analysis by CFDsPros - Written by Cory Mitchell, CMT