New chart as of May 27, 2009, after the close.
Chart republished to show the progress of the rally.
The
yellow arrow points to the
Barometer-plot. The plot has worked its way past the
line pointed to by the green arrow. That
lines represents, in Barometer terms, the November low. Passing this
is critical for the rally to continue. Since passage appears to be
complete, Barometer models now indicate a new leg up for the stock market
that could be choppy during earnings season.
Note the orange arrow.
It represent the Barometer support that appears to have been tested
successfully (blue
arrow).
Previous text: The Barometer channel chart of February 20, 2009 shows a probable new
channel being developed. This new channel is depicted by the white
line at a 45 degree angle, pointed to by the red
arrow.
If
Monday/ Tuesday February 23-24, 2009 is not a positive day, then it would appear that
this new "short-term" channel would have failed, but not necessarily the
bottom of this bear market.
The white horizontal line, pointed to by the green
arrow, represents the line that the November 2008 [S&P 500 index] low
occurred, according to the Barometer models.
If there are sufficient number of negative market days next week, it
could send the Barometer plot-- yellow line just below the
new channel-- sharply lower towards the
blue arrow.
If that were to happen, along with more panic selling (capitulation) and
if the market rallies from that point, we could be witnessing a bottom
successfully tested.
On the other hand, if the Barometer plot breaks through that point
depicted by the blue arrow, we could be in for
more selling.
Most likely the forecast will stay at caution during this period unless
other developments arise.
This particular chart is updated daily
but not published on the website routinely, for security reasons.
However, there is a similar flash chart that is
displayed daily, located in the
Market Snapshot section.
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