Technicals | Mar 08 2011
By Rudi Filapek-Vandyck
The TechWizard is amongst market watchers who have been taken by surprise by the weakness in global equity markets since Friday. However, he also reports he's not too worried at this stage.
As a matter of fact, and as can be seen on the chart below, this month's correction in the S&P500 index looks eerily similar to the short term correction that took place in December, he reports. This should bode well for equities in the medium to longer term.
The Wizard also notes the MACD indicator is looking similar this time around as was the case in December. Price action is showing a similar triangle correction on charts.
As long as 1300 holds for the S&P500 on a weekly closing basis the Wizard remains of the view that what we are witnessing is simply a temporary pull back. If 1300 gives in, however, the market's focus will shift to 1250 in a sign that a much bigger correction is among us, he says.
The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au. All views expressed are the TechWizard's, not FNArena's (see our disclaimer).
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.