After 2011's volatile movements in the S&P 500 index, we received a long-term buy signal in mid October basis the June 2012 E-mini S&P 500 contract.
However, the market keeps bumping up against the 1365 to 1370 area and then sells off.
Currently on a long-term basis, the market would need to close below 1321 for a new short signal to occur. There is strong support in the 1337 area.
Our indicators are showing the market entering into an overbought region, but our long-term indicators can remain overbought or oversold for a while before the market finally begins to turn. However, we need to be aware of the area it has entered.
On a long-term basis the market has been holding above our initial targets of 1254 and 1347. If the market continues the rally, the next long-term targets are 1425 to 1440.
On a short-term basis, we received a buy signal on Feb 3th that held until March 5th. On March 9th we received a new short-term buy signal. Currently, if 1334 is taken out, the short-term signal could turn neutral.
The market has held above our initial short-term level of 1339. The next resistance area is 1370 to 1405.
The market is at a turning point of either moving forward or having some consolidation. The next support level of consolidation would be about 1325.
Copyright ©2012 Mark Shore. Contact the author for permission for republication at email@example.com www.shorecapmgmt.com Mark Shore publishes research, consults on alternative investments and conducts educational workshops. Mark Shore is also an Adjunct Professor at DePaul University's Kellstadt Graduate School of Business in Chicago where he teaches a managed futures/ global macro course.
Past performance is not necessarily indicative of future results. There is risk of loss when investing in futures and options. Always review a complete CTA disclosure document before investing in any Managed Futures program. Managed futures and futures trading can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.