Wednesday, August 25, 2010

S&P 500 likely to test 1040 area in quest for oversold, over-pessimistic bounce

The SPX will reach an ABC zigzag symmetry target around the 1040 level which is also one target of the bearish head and shoulders on it's daily chart below. The TRIN is VERY oversold so expect a snap back once the market is ready to turn. A retest of the 1083-1097 would not be unexpected into the new month, new money time frame - end of August to early September. Sentiment is rather pessimistic and after the lower move today indicated by futures around $SPX 1040, it should get overly pessimistic enough to help support a reaction bounce too.

Be sure to check out similar info from Terry Laundry below - the SPX is testing the lower bands: Terry Laundry's T Theory™ Foundation: T Theory™ Daily Updates, Forecasts, Charts and Data website at Below is a quote of what's there today and Terry's links in the quote go to his website and charts and audio - these are his links.

For the Wednesday August 25 2010 discussion below just click on the PDF link to open any chart and listen to my Audio commentary by clicking on the audio Download link.

Audio Commentary (click on this link) Download TTFAudio2010082

Chart#1 Download EnvelopeTTheory20100824pdf

Chart#2 Download 1995-Pres ADTs20100824pdf

And below are my own 2 charts plus the SentimenTrader gauge. TRIN shows oversold above 1.2 especially on the 10-dma, and right now ALL the moving averages on my chart are well above 1.2!

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