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10/08/2004 Archived Entry: "Fibmaster's daily update"

S&P (E-Mini)

Overview:
The S&P and NASDAQ are above key resistance levels now (though the DOW has dropped back below), which is officially a bullish condition. Even though the daily charts look bullish, the long-term charts (weekly) are still bearish and overbought. So there is still a good chance of a return to the downward channel on the weekly charts. It is too early to call a top, but keep the short side in mind if you see weakness at Fib levels.

Detail Oct 7 - The S&P E-mini broke above resistance an out of the down trend-line last week. Today was a severe down-day, bringing the S&P back down to support levels. With the Weekly chart looking overbought and tired, and the daily chart bullish and at support, what is a trader to do? The S&P has key support a little above 1127. If 1127 support breaks, that will be a signal to short rallies. If the daily chart closes below there, investors should seriously consider shorting the market. Unless that level breaks, the market is bullish or in a consolidation. Between 1127 and 1147, I caution against aggressive long or short trades. Take closer profit exits, trade smaller positions, and most of all respect your stops! Above 1147 the market is in clear bullish territory.

Neal Hughes, FibMaster at http://www.FibMarkets.com, is a widely respected expert on Fibonacci Analysis. Neal has been in the markets for over 20 years, and has distilled what he has learned into a complete trading methodology that maximizes gains and controls risk which he publishes in his newsletter, ProfitPoint. He is also the author of several universally acclaimed Video Seminars on his website. For those new to Fibonacci analysis, Neal provides FREE Fibonacci lessons, available here: http://www.fibmarkets.com/cgi-local/aefs/signup.cgi
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