All Hell Breaking Loose?

Since our last technical analysis installment, the S&P has fallen below the April 18th low of $1294.70 and has remained below that level for nearly the entire month of June. As predicted, index prices have also since fallen 3% to a short term low around 1258 and presently sit just above another key support: the March 16th low of 1249 (see "A" in Figure 1). Should that level fail, indeed "all hell may break loose"!

All Hell Breaking Loose?

The tension in the current price movements is accentuated by several converging lines of support and resistance:

• Resistance: the April low of 1294;
• Support: the March low of 1250;
• Resistance: 20 day moving average at 1287;
• Support 200 day moving average at 1264;
• Resistance: the falling trend-line that has acted as resistance to any rally -- see grey dotted line labeled with “B” above

Of particular note is the current price relative to the 200 day moving average. A decisive drop below this level would likely prompt institutional selling.

In any case, index prices are definitely poised for a big move in either direction. With austerity measures in Greece hanging on a single-vote; with the possibility of pre-earnings announcements looming any day; and with seasonal weakness likely through the end of June, short-term capitulation to 1233-1240 would seem a precursor to any significant Fourth-of-July rally. Let the sparks fly!



Article should interest investors in Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), State Street (NYSE: STT), Janus (NYSE: JNS), T. Rowe Price (Nasdaq: TROW), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM), Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), General Employment Enterprises (NYSE: JOB) and TeamStaff (Nasdaq: TSTF).

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