Software & Finance

S&P 500 - Mar 2011 Technical Forecast

Feb 28, 2011 S&P 500 closed today at 1327.22 which is just above its two and half years high. S&P closed above its 10, 21, 50 and 200 days EMA and giving us a strong bull signal.

With US unemployment rate (Seasonally Adjusted) remains at 9.0% in Jan 2010 and declining home prices, double dip is inevitable for US in the long term. Fed can not keep the rate low for a long time. When they start increasing the rate, home prices will go down further and it would trigger a new wave of foreclosures.

Let's look the S&P technical levels. S&P 500 is trading well above its 200 days moving average of 1210.81 and above its 50 days EMA of 1289.87. It gives a (wrong) bull signal on S&P 500 to go long.

However it would be perfect time to liquidate the long positions. Still Market is holding its level close to annual high because of its strong technical support. Speculators and Day Traders are hesitating to short the market because of technical support.

This might be the worst time to take long positions on US stock market. Barclays - US Long Term Treasuries Bond ETF (TLT) closed at 92.40 is a good buy and TLT gained 2.15% in the month of Feb 2011 represents that S&P 500 will have to test its 50 and 200 days EMA in the coming weeks. TLT is a leading indicator and significant rise in TLT would be taken as -VE for the US stock market.

Technical Indicators

10 Days EMA 1321.2718
21 Days EMA 1315.25
50 Days EMA 1289.87
200 Days EMA 1201.83

Posted onĀ Feb 28, 2011