Market Analysis for Oct 19th, 2005
There are many aspects of the enclosed daily SPX chart
that could prove interesting, however, for today, let's
take compare the "mirror images" exhibited by the price
pattern between Mar. & Oct. 2004 on one hand, and
during the same time period during 2005. Notice that in
2004 (an election year, by the way), the index hit its
yearly LOW in Aug., after carving-out a 7 month DOWN-
channel, established a secondary low in Oct., and then
accelerated above its rising 200 DMA, and key resistance
into and after the results of the Nov. election...
Now look at 2005: The index hit its yearly HIGH in Aug. after carving-out a 5 month UP-channel, established secondary and tertiary highs in Sept. and Oct., and accelerated BELOW its cresting 200 DMA and key support at 1200 into last week's low at 1168.42-- possibly on the way to test the bottom of the channel around 1159? If the 2005-2004 inverse symmetry continues to unfold, then we should not be surprise to see the SPX break the channel support line around 1159, and accelerate to the downside beneath the Apr. low at 1136.22 into the 1100 target zone. MJP 10/19/05 1:15 PM ET (1175.39... e-SPZ @ 1178.25)
For more of Mike Paulenoff, sign up for a FREE 30-Day Trial to his E-Mini/Index Futures diary. Or try his QQQ Trading Diary.