In September The Bull's Ceded the Advantage to the Bears
Support has now become resistance.
9/18 Closed Below the 5/23 - 8/3 Low Trend Line.
9/19 Rallied back above.
9/20 Managed to stay above the trend line but got stopped dead by the 13, 50, and 200 SMA, which had all come together for the occasion.
Failure to penetrate this resistance seemed to result in the decline which began on 9/21, saw 9/22 plunge deeply below the trend line but manage to close above it, and culminated in the higher low held on 9/27 (when compared to 9/22). The attempt to rally off of this higher low was capped by the trend line which clearly has become resistance. Failure to penetrate the line resulted in a gap down to the 13 SMA and a close which gave back all the prior day's gain.
From the Bull's perspective time is short. The 50, and 200 day SMA are all now racing to cross below the trendline and once again join up with the 13 SMA. The convergence of all of these averages and the trend line is going to make getting above the old support line, now resistance, a tough battle.
Nominal support may be found on the new low trend line drawn from 5/24 and 9/22, although the opportunity to use it for a bounce may be fairly limited. Regaining the support of the old trendline would certainly give the Bull's, as well as the May lows, a chance of holding. A penetration of this new line prior to regaining the old trend line would seem to set up 9/22, 8/3, and 5/24 as milestones in the eventual decline.
On $COMPX while 3600 may be an important psychological barrier a close below 6/1 gap support at 3583 should send prudent investors <gg> to T bills.
If I were a betting man I'd say we might see some upside as the Index attempts to regain the support of the original trendline, however didn't Fall begin on September 22, 2000? |
