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Technical Analysis: S&P 500 Setting Up For Large Move

FMX | Connect (Reported 5/12/10)

 

Overview:

The market is setting up for a sharp move lower. Within the next two days, we think there’s a strong probability that the S&P will fill the large gap it left on Monday and continue lower for an eventual retest of 1056.










Chart 1: Front Month 5-day 15 minute S&P 500 Futures

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The above chart illustrates the S&P futures from a 5-day 15-minute time frame, and it appears that the market is in the process of forming a head & shoulders formation. The target for this formation happens to coincide with Monday’s gap.

Chart 2: Front Month Daily S&P 500 Futures

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Above is a daily chart of the S&P futures going back to mid-2009. A head and shoulder formation may be at play here as well. If this formation materializes, expect to see a short-term bounce off the 1056 lows lows for an eventual target of around 900.

 

 

 

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