S&P 500: Intermediate-Term Bear Market Still Intact
The intermediate-term signal, the comparison of the 25 day & 50 day simple moving averages, still indicates an ongoing bear market for the S&P 500. That is, the 25d sma is less than the 50d sma. This is the first such bear market signal since July 2009, occurring on February 10, and only the second one since the March 2009 bottom. The 50d sma = 1108.42, revealing how deep this pullback has been. The recent pullback created price damage that has yet to be repaired through sustained higher prices.
The 25d sma is descending steeply plus the 50d sma is descending for the first time since March & April 2009. The 100d sma has flattened out. The 200d sma rate of ascent is decreasing. Most bothersome is the SPX breaking down through the 50d & 100d sma's and the 25d sma breaking down through the 50d sma. The SPX did regain the 100d sma today, Wednesday, February 17. Overall, the are indications of price weakness still persist.
The uptrend line in yellow is from the March 9, 2009 closing low of 676.53 up through the January 29, 2010 closing low of 1073.87. The SPX had broken down through this trendline but regained the trendline today, a bullish price signal. Whether the SPX can hold this trendline, this rate of price ascent, will be interesting to monitor and will indicate price strength.
The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The SPX is well above this 1048.94 signal with a close today of 1099.51, which is the next higher horizontal yellow line.
The close today of 1099.51 has hit resistance at the October 2009 highs plus the sideways channel trading in Novermber & December 2009. Regaining the 1140+ price area after the three huge down days of January 20, 21, & 22, 2010 appears a tough slog, due to all of this resistance above.
Conclusion: The SPX has had a decent rally off the lows of earlier this month. Holding the current price levels and higher prices will eventually sustain a signal that an intermediate-term bull market has returned through ongoing price strength. The long-term trend is still bullish, as reviewed in the previous blog post. The intermediate-term trend is still bearish.
US Dollar: Intermediate-Term Bull Market Still Intact
The intermediate-term signal, the comparison of the 25 day & 50 day simple moving averages, still indicates an ongoing bull market for the S&P 500. That is, the 25d sma is greater than the 50d sma and has been since mid-December 2009. This is the first such bull market since from early February 2009 through early April 2009. This is the first bull market since the March 2009 highs and subsequent decline in a bear market.
The 25d sma is ascending steeply, as is the 50d sma, for the first time since February & March 2009. The 100d sma is also ascending, but the 200d sma continues descending.. The 50d sma crossed above the 100d sma on January 22, 2010, signalling price strength, and is now approaching the descendinig 200d sma. The US Dollar did regain the benchmark 80 price today. Overall, these are indications the price strength.
The downtrend line in yellow is from the January 2002 closing high of 120.22, overlayed from the monthly chart. As can be seen, the US Dollar current price of 80.43 is still significantly below this very long-term downtrend line, which has a current approximate price of 83.60+.
The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. The US Dollar is well above this 78.94 signal with a close today of 80.43, which is the highest horizontal yellow line. The middle, second highest, yellow horizontal line is the benchmark 80 price.
The close today of 80.43 has hit resistance at the recent highs this month plus the sideways trading in May, June, & July 2009. Penetrating through all this resistance would be a a major upside breakout.
Conclusion: The US Dollar has had a remarkable rally from the lows of late November & early December 2009. The long-term trend is still bullish, as reviewed in the previous blog post. The intermediate-term trend is still bullish.