S&P Market Quarterly & Monthly Overviews

Here is the S&P 500 on a quarterly time period. It looks very interesting. Right now, it's at the 38.2% retracement. I can actually see this going to 1120ish, which would be 50%. This is a fairly neutral point.

With a Falling Three Method, you can have a retracement from a partial all the way to 100% retracement to continue the bearish movement. It's not until it breaks the 100% mark that it is no longer a Falling Three.

As I look at bullish volume, last quarter's volume was not as strong as the prior 2 quarters of bearish volume. We'll really have to take a look at this quarter's volume and see where it ends, which is not until the end of Sep'09, basically another 7.5 more weeks to go.

If price action pulls up to the 1120ish area, or at least closes higher than 919, but bullish volume is weaker than last quarter, that is a sign that continuation of bullishness is coming to an end soon. Granted, these are QUARTERS, and not days or weeks or even months.

Actually, I decided to also include the Monthly view of the S&P, but a closer view.

As you'll notice the monthly volumes are losing strength in the bullish side as price action is rising. This is what is called bearish divergence. Notice we are also at the 200 EMA, so this looks to be a good testing point.

MACD is showing slightly more bullishness, as RSI is still showing an uptrend.

What does this mean? It just means to have your stops in place. Where would I have my cost stop? about 900 on the S&P. I basically drew a line of the lows for March & July and used this as my price action uptrend line and keeping my cost stops below this line for whatever month I'm at.
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