Tuesday, June 07, 2011

S&P 1250 is key

The S&P 500 index has been declining towards two trend lines - one long term rising support line which goes back to the March 2009 low, and a short term support level at 1257.

Long term:
Short term:
These two trend lines have basically met at the same price level now, meaning that if the S&P declines through 1250, it will simultaneously violate two supports, leaving the door open to a large continuing decline. However, since sentiment is quite pessimistic right now, my guess is that the stock market will bounce off of these support lines and continue the rally. Time will tell.

1 comment:

Cathy said...

Yes. Time will tell. Did you see what happened at the OPEC meeting?
It's all about affordable energy.
Interesting times. .