S&P 500 Large Cap Index showing support at 200 day ema and resistance at 20/50 day ema
So does a whole weekend quell the fears of investors over a looming Euro financial collapse? Well, at least the talking heads on CNBC are saying that. But the problem didn’t go away, the talking heads and the “pundits” are still high from the spectacular come back the markets achieved after facing near annihilation by touching the 200 day then springing back up, printing what appears to be a Hammer candlestick (see description below). A trading range looks to be forming between the 200 day exponential moving average below and the 20/50 day moving averages from above.
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Was it the Jobs report that says the unemployment rate dropped, even though more people are out of work, or was it the barrage of great earnings reports from companies that are improving their bottom line by letting go of half their work force?
Hammer
Bullish Hammer: Hammer candlesticks form when a stock moves significantly lower after the open, but rallies to close well above the intraday low. The resulting candlestick looks like a hammer with a long handle. If this candlestick forms during an advance, then it is called a Hanging Man
Apple didn’t go along for the ride with the broader markets on Friday as it was relatively tame, having another inside day. Overall AAPL is in a weak downtrend, even though it finished at 195.46 up with a respectful gain of +3.41 (1.78%).
S&P 500 Weekly Chart, Uptrend Stymied by 50% Fibonacci and 200 Day Moving Average. Left with a Spinning Top Candle, a Sign of Indecision.
The weekly view shows the markets finished down printing a huge spinning top. Spinning tops are signs of indecision. So when you combine this indecisions with strong support below and strong resistance above, you have to conclude that will be the trading range for the near-term at least. The bias is still to go lower, although there still may be some air left from Friday’s performance to lift this market slightly. I’m anticipating that we will be revisiting the 200 day support before the week is over.
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Spinning Top
Spinning Top: Candlestick lines that have small bodies with upper and lower shadows that exceed the length of the body. Spinning tops signal indecision.
Tagged as: AAPL, SPX
