S&P Decline Doesn't Yet Inflict Serious Technical Damage - Mid-Day Minute for Mon November 27th 2006

Nov 27

S&P Decline Doesn't Yet Inflict Serious Technical Damage

by Mike Paulenoff, Mon November 27th, 2006

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Yes, the SPX is down 1.2% so far today- although we have to see if it actually can close down more than 1% for the first time in quite a while. From a very BIG picture perspective, let's notice that today's decline merely takes the index back to the top channel zone (1390/70). To inflict some serious damage to the overall chart pattern-- that will point the SPX towards a total retrace of the width of the channel (to 1270)-- the SPX has to first slice below the sharply rising 10 week MA at 1373, and then break below its prior pullback low at 1360.98 from Nov. 3rd. In addition, I will be watching the structure of the decline to see if it exhibits bearish form, which will provide us with important clues as to whether or not the June-Nov. uptrend remains dominant. For the time being, based on the enclosed chart structure, the bulls remain in control-- although they are taking a well-deserved breather after a near-vertical assault since Summer.

Chart

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!

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