Wednesday, July 15, 2009
Picking off the sick and weak
I've been laid-out with a fever and annoying cough for a week now. It's been nothing but bedrest, fluids, hot flashes, and the kids on summer break all day.
But, I decided to check in on the SPX this morning, and I see we've popped up over the past few days. But we're still within the down-channel that began in mid-June. The index has appeared to enter a narrowing trading range that starts between 900 and 915 as shown in the pic. above.
While typing this, the markets just opened with the SPX above 917. This is within a margin of error of the boundaries, just like when support was broken on July 8 (see blue circle below). I don't believe that channel boundaries and support/resistance are hard, definitive lines that must be absolutely respected. Especially when there's many technicians out there drawing those same lines, and putting their stops a few pips below those lines. There will be some techies who put their stops a few pips below that, and a few lower, until the trend is finally exhausted.
If the SPX keeps above 915 today, then I'll need to look for a new trend.