Stocks & Commodities V. 23:6 (98, 88): At The Close by Jayanthi Gopalakrishnan
The Standard & Poor’s 500 index has not really been doing much of late to get excited about. If you look at the
daily chart of the index in Figure 1, you will see that it has been bouncing around between its upward sloping trendline (support) and its 50-day moving average (resistance). It has tested that support level three
times, but I am waiting for it to break out above that resistance level before even thinking of going long.
Or perhaps the index will break below the trendline that has been acting as a support level. And as it turned out, a few days later, it was the latter scenario that traders were confronted with, which actually surprised me (Figure 2). I was under the impression that with oil prices coming down slightly, the equity markets
would become more bullish. In fact, I was looking for crude oil prices to hit at least $52 a barrel before equity markets turned up. But it seems that the drop in oil prices didn’t have a positive effect after all.