sp500 Showing Interesting Symmetry from the September 2010 Low

The sp500 continues to trend higher since the September 2010 low but I noticed today a somewhat interesting symmetry from this important low.  The handle formation of the large cup and handle pattern on the sp500 has served as somewhat of a pivot point and possibly mid point of the two current rallies.

The first rally was from the September 1st 2010 low up to the handle formation on the 5th of November 2010.  Then the handle continued to form and the sp500 launched out of the handle formation creating a new persistent really which we find ourselves in now.

The interesting fact is that currently the duration of the first rally from the September lows is 46 trading days.  Currently we are 47 trading days into the second symmetrical leg up since the handle formation.

sp50020110209

The yellow shaded area in the chart above represents the pivot point or the handle formation of the large cup and handle formation.  Sometimes clear symmetry is seen in markets from important pivot points.  Expecting perfect symmetry of course is unrealistic (for example, expecting the market to top out in exactly the same number of days as the first leg).  But I have seen plenty of stocks and indices make clear somewhat equal measured moves based on important pivot points.  So I would say the current setup is something to be aware of and a possible sign that ‘we are getting close’ to the eventual expected market correction.

The cup and handle formation is also coming close to its implied projected measurement.  Then if we also consider the Nasdaq composite become at risk of a correction in the 2860 range (since it would be at the 2007 previous highs), it paints a combined picture of some type of market pausing point, or even a sharp correction.

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7 comments on “sp500 Showing Interesting Symmetry from the September 2010 Low
  1. shrihas says:

    Thanks for the update.

    My stoploss is at 1228 and I was about to be stopped out yesterday but was saved. Let us see how it goes.

    My earlier stop loss was at 1317 which I moved to 1322 and then to 1328…

    Tomorrow (10th Feb is important day) and if S&P touches 1304 then we may have good correction, IMO.

    I expect S&P to touch 1304 on Thursday and bounce back to 1316ish and then fall to something like 1254 in next 14 trading sessions…let us see how it goes…

  2. Geoff says:

    the print on the weekly Aall Investor Sentiment index at the close of business today should be interesting. will know tomorrow morning very early. last reading was 52% bullish and with nothing but up move since last wednesday’s reading, tonights reading should be interesting.

  3. Tom Tom says:

    Seems plausible we could be at a top soon, but the summation index is still holding up…but admittedly it is sometimes a lagging indicator. But RSI of the summation index may bust above the 70 line.

    http://stockcharts.com/h-sc/ui?s=$NYSI&p=D&yr=1&mn=4&dy=0&id=p03234377301

  4. Ed says:

    We may have a correction starting tomorrow, since I took some more long positions yesterday of course. But I have to admit I’ve never heard of a measured moved based on time as opposed to distance

  5. Geoff says:

    Aall for wk ending 2/9/11 was 49% Bullish, slightly lower than preceding wks 51%. A surprise. Joe Public investor enthusiasm not stoked by last 5 days persistent climb in Dow. Maybe, just maybe, JP is noting that Dow Transports are stubbornly diverging.

  6. Tom says:

    Actually the distance between the two sections was somewhat similar as well… maybe it means nothing, but sometimes I have seen the time that market goes sideways is important general calculation to see how much energy or cause there is the for the subsequent move up or down….

  7. Tom says:

    Maybe all the Egypt news is making Joe Public investor somewhat more bearish than usual…

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