Home > Uncategorized > Weekly Overview: 2010/02/01: Friday Over-Extension of a Terrible Phase, or the Start of the Next Leg Straight Down?

Weekly Overview: 2010/02/01: Friday Over-Extension of a Terrible Phase, or the Start of the Next Leg Straight Down?

▪ While the equities technical picture looks bearish overall, the key will now be whether March S&P 500 future remains below 1,080-75 or manages to ratchet back above it and hold on back in the higher range. It is the fulcrum between the DJIA and NASDAQ 100. (The reasons for that are available in our full report.) Next slower interim support if March S&P 500 future fails is 1,050-42, yet with major support not until the 1,025-15 area. However, if it can recover into the higher range, a retest of the previously important 1,102-08 area is likely, with an outside possibility it might even see 1,125 once again. We shall see.

▪ Of course, this significant focus on the March S&P 500 future is due not only to its bellwether status regarding the fortunes of the other equity indices; it is also the heavy intermarket influence it provides trends in other asset classes. It was of note that the fixed income markets were only modestly bid into what appeared to be a major equities failure on Friday, with a lack of commensurate weakness below support in Gold or major further strength in the US dollar. All of which may have highly prismatic explanations…

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