Q: How has the SPX performed when, in the last three quarters of the year, it crosses a five-week low on a day it closes above its 75-day average but below its 200-day average?
A: According to the 11 previous occurrences of this event, omitting repeat occurrences within 10 trading days, SPX has shown a strong bearish edge that peaks six trading days after the event. Thus, the projected date for the peak of the bearish edge relative to the current event date (Tuesday, June 3, 2008) is Wednesday, June 11, 2008.
SPX declines in 82% of the cases (9 of 11) by an average of -2.9% relative to the close on the event date. The average of the 2 rallies is 0.8%. The overall return of the 11 cases is -2.2%, which, based on the close of SPX on the event date (1377.65), provides a target price of 1347.34.
HYPERLINK "http://www.markethistory.com/staff/detail.html?s=rsoudan" Ryan Soudan is an analyst with MarketHistory.com.
