Here is a weekly chart of the SPX showing the 20-week (red) and 100-week (blue) moving averages (click to enlarge):
The 100-week halted the rally, while the 20-week has been supporting the rally. So, as these two pincers converge, we are getting volatile ping-pong action. This will build to a boil until prices explode out of the apex. Traders are obviously keyed into the FOMC announcement on Wednesday, and the big jobs report Friday. I would expect a breakout, one way or another, by the end of this week.
For a model, look back on your chart to July. The 20-day and 50-day were converging then, and the SPX blasted out during the week ending July 17th. So, the breakout won’t be hard to spot. It should be rather dramatic, in fact.
K,
Isn’t the absolute level of the TED spread still pretty low? From this chart:
http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND
…it looks like it is still much lower than in 2005, for example.
Matt
Matt,
50 is the average level of TED. but i have seen state street investor index go down the past 2 months while ted has done opposite.
State street index has been going up since oct 2008 if not earlier so I do know maybe 6 months from not if not this month we will really grind some gears south.
here is the link.
http://www.statestreet.com/industry_insights/investor_confidence_index/ici_overview.html
sure I might be getting ahead of myself but its good to have an idea where things are looking in general then follow technical plays
that being said. I will satisfy Julie’s request for a big move so up up we go?
K,
It’s not a prediction if it has a “?” at the end.
Matt
I shake my fist at you Matt!
I was 3/3 today in election Picks
if you use the 20 and 100 on hourly you will see how 100hr MA is acting as resistance (or support in a bit once the candle closes)