I reviewed the long term chart of SPX again. The slope also indicates the market will hit upward resistance around the 200 DMA 950-850 range, depending on when the market hits the slope. The slope line combined with 200 DMA will create a significant force, one which I believe the market will fail downward when hit.
The key point is this: IF the market is "destined" to hit the slope line, and the 200 DMA, the market should be pretty choppy for the next 1 to 4 months, until the slope line gets closer to the SPX index level.
Once hit, the market will likely fail quickly, due to the slope incline.
The "slope" of the current decline indicates to me that the market will have a "come to Jesus" moment around Christmas into Q1 of 2010, depending on how you draw the slope. When the market will hits the slope line AND the 800 level, it may be from the "bottom". (meaning market falls lower and rallies back to that point).
That level will be the final failure where the market tanks for its final swan dive.
Again, this is all pure pontification, take with a grain of salt. But the trend line down and the 200 DMA are both worth watching to see where resistance will appear for trending higher.
|From WebSurfinMurf's Financial Blog|