| Wesley Chapel, Florida, March 31, 2008 -- With lots of talk about credit
crunches and recession backed up by weak economic statistics, it’s not
surprising that the pressure may be getting to the stock indexes, which have
remained rather resilient compared to other markets so far.
As the chart of the
popular E-mini S&P 500 futures contract shows, the market has clearly been
heading down since the first of the year, and the highs are getting
progressively lower. Then combine the traditional chart signals with
indications from
VantagePoint Intermarket Analysis Software,
and it becomes apparent why traders might be bearish:
- VantagePoint’s
predicted short-term difference (red line) has crossed below the
predicted long-term difference (green line) and below the zero line.
- VantagePoint’s
predicted Neural Index, a proprietary indicator, is at 0.00, a bearish
reading.
- VantagePoint’s
predicted medium-term exponential moving average (blue line) is on the
verge of crossing below the actual medium-term simple moving average
(black line), the final step to suggest a short position might be in
order.
Note what happened to
E-mini prices when those conditions occurred together in the past (arrows).
If the moving average crossover materializes, the initial downside target
would be the double bottom in the 1253-1255 area (dashed line).
Going back to traditional
chart analysis again, the recent E-mini action might be viewed as a
descending triangle with the breakout generally going through the bottom
flat side of the triangle as the market resumes the trend it was in when it
went into the triangle. If that line gives way, the mid-2006 lows in the
1220 area become the next target. You can read more about this stock, along
with other educational articles at
TradingEducation.com.
About TradingEducation.com, LLC
Established in September 2005, TradingEducation.com, LLC (www.TradingEducation.com)
has developed into a comprehensive internet resource offering traders free
educational materials, quotes, and market relevant news for stocks,
exchange-traded funds, commodities, currencies, futures and options. Traders
from all experience levels can benefit from the wealth of information and
tools available at TradingEducation.com which seeks to enhance their trading
strategies and avoid costly mistakes. All information on
TradingEducation.com, LLC websites is free to the public, with operational
initiatives supported solely by advertisers.
About Market Technologies, LLC
Headquartered in Tampa Bay since its founding in 1979 by Louis B.
Mendelsohn, with trading software customers in over 90 countries worldwide,
Market Technologies is a fast growing, Inc. 500, company and recognized
world leader in market forecasting. Market Technologies researches and
develops proprietary trend forecasting and market timing technologies that
utilize artificial intelligence applied to intermarket and hurricaneomic
analysis, in order to forecast various commodity and financial markets
throughout the world. These presently include, but are not limited to,
stocks, stock indexes, ETFs, energies, interest rates, currencies, metals,
grains, meats, softs and Forex, covering over 600 world markets.
www.TraderTech.com
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