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5/21/12

Stocks tried to rally on Friday but once again, investors did not seem too excited about holding over the weekend with things rapidly deteriorating in Europe. By the close, the Dow lost 73-points, making it 6 consecutive losing days.

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SP 500 achieved the head and shoulders target on Friday, May 18; falling 72 points from the break in the neckline and landing right on the predicted number (intra-day) of 1292. This is a resistance and pivot area, as viewed in the chart below. Should it break, the next decent support is the 200 ma coming in at 1278 and then very good resistance just underneath at 1269. So, barring a real collapse in Europe, the market should be primed to rally. My cycle analysis suggests that a turning point ...

It wasn't that long ago (April 30th to be exact), that the Top 50 had a total stock exposure of 92%. The week after that their exposure dropped a whopping 61% for a total stock allocation of 31%. The broader market fell that week, but not by much (S fund was only down about 0.24%). We had some dip buyers in the group a week later as total stock exposure for the Top 50 rose to 48.6%. But those dip buyers met with stiff selling pressure as stocks plummeted (S fund was down 6.03%) for the week. ...

After all the hype, Facebook (FB) only climbed 0.23 (0.61%) Friday, with 580 million shares traded.

“After creating a host of buzz and hype, the Facebook IPO fell flat on its opening day Friday. The share that was expected to flood the Wall Street witnessed a mere $0.23 jump in price. And the situation could become worse for the social media king and could go below the offering price if JP Morgan and Morgan Stanley didn't buy when the FB stock hit the offering price.”

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Where will the market find support and reverse? Here is a weekend update showing four long term charts, in the daily timeframe, of the simple moving average (ma). The moving averages may not look familiar to you, because they are long term and follow the Fibonacci sequence. They are the: 233, 377 and 610 moving averages. Because of the recent fairly severe sell-off, they may be useful as a guide post to see where a possible turning point area may lie.

On the SP 500 chart, representing ...