S&P 500 Chart Review – May 8, 2009

Happy Mother’s Day to all moms today! I’m making this short today so I can go spend the day with my wife, my mother and my mother-in-law.

I wanted to get this same chart (a week later) up from last week. Four of the trend lines remain intact. I’m expecting a strong bit of resistance at some point this week and possibly the beginning of a retracement towards earlier lower levels. The main cause could be the longest line, but the horizontal line of the previous high in January could be very important too.

Read more on S&P 500 (SPX) at Wikinvest

Comments (4)

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4 Comments »

Comment by Stock Trades

The markets seem a little overbought but at the same time having the Stress Test behind us, the uncertainty for the banks is gone which is a very positive stimulus.
Comment by Alex Fotopoulos

I’d argue that uncertainty for the banks still is hanging out there. While the rate of unemployment claims has slowed, it’s still way down and borrowers are still defaulting on loans. Banks will be diluting shares and although a lot of that is accounted for in share prices, the reality of it could still cause some profit taking soon. Also, the rate of growth for banks will be slow either way and they might be getting ahead of themselves already.
Comment by Joe

How do you guys think that the consumer credit and commercial real estate issues on the horizon are going to effect this rally??
Comment by Alex Fotopoulos

Consumer credit needs to loosen up more still. From a personal level, we were able to refinance our house, but it took a lot more paperwork for a smaller loan than we had before. I’ve heard friends who couldn’t refi because their homes lost value. Eventually that’s going to have to weigh in to the ongoing reduce spending by consumers.
Commercial real estate is another animal. If that deterioration picks up speed it could help in stopping the rally sooner rather than later, but then again you know I think we’re due for a break now anyway. So, that could be an excuse, among others, to pull us back some more.

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