We have a lot to show, so we’ll keep each one short and sweet.
First, an update on the SPX battle with the 50 day. The bear trap looks to be pretty solid with assistance from the Feds. How much backing and filling needs done is still up for debate. We have added a new indicator to the bottom of the chart this time, the daily 13/34 exponential moving average indicator. We have it set on a favorite parameter of John Murphy at Stockcharts.com that we have referenced previously in Is it really 2001 again? Look for further reference in the charts below. This indicator on the daily chart is more of a leading indicator (subject to some whipsaw) and becomes more valuable when combined with the medium and long period charts. The daily indicator has turned positive (above zero) and has held positive ground for the first time since early in the year. This is the most positive showing for this indicator since April/May of 2008.
Here is a weekly shot of the same indicator. Even with this indicator still deeply in negative territory (below zero) a clear positive trend change is visible. This is confirmed by the SPX moving above the 13 week exponential moving average, which drags the indicator higher. These are also the first positive developments in this indicator since April/May of 2008.
Finally we have the monthly chart featuring the indicators referenced previously (MACD, RSI, ROC) plus an overlay of the 20 month Bollinger Bands set to two standard deviations. This shows all of these indicators to have been severely stretched, yet showing signs of recovery. The MACD histogram is now climbing for two months in a row and the RSI is closing in on 30, which marks the top of oversold territory. The ROC has at least ceased its vertical drop and the Bollinger Bands are finally well below the current price as opposed to being violently penetrated to the downside. This at least shows stabilization, with potential being revealed by the shorter periods.