S&P 500 Update

From much of what I follow, I believe it's likely that we are entering a period of malaise and eventual weakness in the market over the next handful of months. As I have noted a few time, I suspect we have seen the market lows for 2009. But, I really don't like shorter term predictions. Predicting reduces the effectiveness of returns. It's betting too far into the future and that is partly what has buried Wall Street. That coupled with leverage.

That said, let's look at a chart we have thrown up here two or three times since the rally started. But, this time it's the SPYders rather than the cash S&P. Back on June 12th we wrote that the first major support level for the S&P is 800 using the Market Profile and Volume at Price. That corresponds nicely with the 50% retracement level that has developed on the above chart. It also corresponds well with the head and shoulders pattern developing on the chart which has a downside of about 810 on the SPYders. If the market does resolve itself in this manner, I don't anticipate it will be the end of any market weakness because we are essentially looking at a micro pattern. Again, I prefer to take what the market gives rather than speculate on the short term so we shall see.