Tuesday, June 5, 2012

The Morning Call-Don't assume the jobs number lessens Europe's importance

The Market


Monday Morning Chartology

Last week was reasonably calm, that is, until Friday---when the bottom dropped out. The S&P (1276) broke the 1292 support level and kept going through the 200 day moving average (1285). Of course, our time and distance discipline technically kicks in. I say ‘technically’ since 1292 never really achieved true support level status. On the other hand the 200 day moving average is a viable support level; so it is the moving average that I will focus on as support. However, this break won’t be confirmed until either Friday (time) or it closes below 1259 (distance).

As you know, there remain three additional potential support levels: (1) the neckline of the reverse head and shoulders pattern [1266], the lower boundary of its intermediate term up trend [1232] (3) the old resistance/support level [1230]---note the proximity to the intermediate term up trend lower boundary