S&P 500 Equity Market Review
SPX Fibonacci Fan levels
Chart courtesy of Fusion Analytics
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As seen above the S&P 500 Index tested and reversed off its lowest fibonacci fan trend line (orange lines) on Friday. This intraday reversal level of 1,044 came was starting to approach the support level of 1,037 we had called for several days ago and the reiterated on Thursday. However for the last two weeks it has rallied above but then fallen back below its downtrend line (red line).
While two weeks of stalling at resistance is not a major concern yet it does at very minimum raise a cautionary tone given the S&P 500 has had such a large, uninterrupted advance. Weekly momentum indicators are losing momentum and are close to flashing some sell signals, however until near term support is broken near 1,026 (blue line and arrows) it is hard to get too negative.
So to reiterate some yellow lights are flashing but the bottom line is the trend is up and remains intact and only a move below the 1,026 level would be viewed as a negative.
-Kevin Lane
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Kevin Lane is one of the founding partners of Fusion Analytics, and is the firm’s director of Quantitative Research. He is the main architect for developing their proprietary stock selection models and trading algorithms. Prior to joining Fusion Analytics, Mr. Lane enjoyed success as the Chief Market Strategist for several sell side institutional brokerage firms. In those capacities he oversaw the firms’ research departments. He produced a broad range of widely followed institutional research publications ranging from industry specific notes to quantitative/fundamental reports on individual stocks. His buy side clientele consisted of many of the nations top money managers and hedge fund managers. Mr. Lane is a member of the Market Technicians Association.
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February 8th, 2010 at 10:19 am
Global equities remain weak, with the MSCI Developed World losing a further 2.1% last week. The index is now 9% down from the 14 January peak. The poor macro backdrop is certainly not helping matters, especially as most of the problems lack any easy fixes.
The Eurozone project is very much in the spotlight, with debate raging on how to solve large debt loads within a rigid currency framework. This is not helping Eurozone equity markets and Portugal (-7.4%), Spain (-7.7%) and Greece (-9.6%) all had a tough week. The Euro Stoxx 50 lost 5.2% putting it back to August 2009 levels.
There seems to be an increasing appetite for Japanese equities amongst investors. We suspect this is due to their underperformance during the last 12 months, rather than a fundamental improvement in the fortunes of Japanese corporates. It is also perhaps because investors are expecting greater trouble elsewhere this year.
Elsewhere last week, the S&P 500 fell just 0.7% last week, the FT All Share lost 2.4% and the MSCI Emerging Market Index dropped 3.8%. Within Emerging Markets, Eastern Europe suffered the most with a 6.1% decline.
February 8th, 2010 at 12:43 pm
[...] keep in mind the index tested and reversed off some key support levels on Friday, according to Kevin Lane, director of quantitative research at Fusion Analytics. “Weekly momentum indicators are [...]
April 7th, 2010 at 9:27 am
[...] and my partner Kevin Lane will be in Dallas the week of May 3rd – 5th,including a visit to Houston on May [...]