Courtesy of Doug Short
Note from Doug: Serge Perreault, a Chartered Accountant and market technician located near Montreal, Canada, was a regular contributor to dshort.com throughout 2010. At the end of the year Serge decided to take a break from his regular weekend update routine, but he has agreed to furnish occasional analyses (and he has an open invitation from me to resume the weekend series). I’m pleased, therefore, to share Serge’s thoughts on the past week and its turbulent conclusion.
Here are Serge’s comments on the chart below:
Here are Serge’s comments on the chart below:
At the end of 2010, the S&P 500 had paused its uptrend from 2009, on mixed momentum and while the RSI momentum indicator had landed in overbought territory. In the new year, the index resumed its ascension but, the RSI reached a major resistance. Then, on Friday, Egypt’s troubles weighted heavily on the index, which took a dive on 13.1% above-average volume for the week. In the coming weeks, let’s watch to see if the index and its momentum indicators will break their supports.
Note: For newcomers to technical analysis, here are brief explanations for the two key indicators that Serge features:
