Last week (Oct 13, 2012) I pointed out how the S&P 500 is ripe for a pullback based on technical analysis. On Friday (Oct 19,2012) the S&P 500 dropped almost 25 points, a huge move downward by any measure. My thesis is coming true, take a look.
The S&P 500 is currently trading in a range between 1460 and 1430 while the MACD is trending lower. This is a sign of weakness and generally results in a move downward. If the S&P 500 closes below the support line of 1430, its next target will be 1400. I typically don’t mix speculation with technical analysis but I wouldn’t be honest if I said the presidential election didn’t weigh in on short term market affects. I suspect a lot of traders are sitting on the sidelines until the results are final. So I don’t expect a lot of market action until then, but of course I don’t have a crystal ball either.
Here’s to our wealth!