Submitted by: Arthur Eckart(294) PeakTrader.com Log in to become a member of Arthur Eckart's Fan Club!
SPX may be developing an inverse head & shoulders pattern, which would create a V-bottom. The implication is SPX will hold roughly 1,440 and test the high at roughly 1,550 before the end of September.
However, if SPX falls significantly below 1,440, e.g. next week and before the FOMC announcement September 18th, a test of the low at 1,370 may take place, which would create a W-bottom.
Intermediate-term technical indicators, e.g. the NYMO 20 & 50 day MAs and the daily NYSI, remain in bullish uptrends, while the CBOE Put/Call MAs are market bullish. However, seasonality is bearish.
Consequently, bank and housing stocks, e.g. C and KBH, may be best at this point, while SPY and IWM may be best on a test of the low, particularly if the test is on lower volume or on a higher low.
PeakTrader top buys are: SPY IWM RKH C WB KBH TOL PFE WMT AA IP AMGN MXIM RMBS NBR SIMG CTIC and DNDN.
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Arthur Albert Eckart is the founder and owner of PeakTrader. Arthur has worked for commercial banks, e.g. Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds from 1999-00. Arthur Eckart has a BA & MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.
Mr Eckart has developed a comprehensive trading methodology using economics, portfolio optimization, and technical analysis to maximize return and minimize risk at the same time and over time. This methodology has resulted in excellent returns with low risk over the past four years.
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