|
The
ULTRA Market Letter
(A complimentary excerpt from a client-only publication) |
February
3, 2004
|
SPX Technical Price Analysis
SPX Uptrend Line Failure
The SPX made a spectacular run from 11/21/03 to the top at 01/26/04 appreciating at an 84% annual rate. Obviously, that rate of return is not sustainable and therefore some type of correction is due. Adding to the case for a correction is the fact that the uptrend line S2 has now failed. A reasonable objective for this correction is S1 currently at around 1085.
February Historical Seasonality (Since 1942)
As with all months, the first and last few days of February have a historical upward bias. If the first three trading days and last two trading days of February are ignored, the remainder of February is not historically bullish. Only 42% of the years have produced gains and the annualized return is minus -9.1%.
The SPX enters a very bullish seasonal period starting at the close on 02/25/04 (February EOM).
SPX Summary
The SPX is due for a correction in February likely finding support around 1085 on S1. This test of S1 could align well with the February EOM bullish period making for a very obvious place to go long with non-mechanical capital.
Compliments of:
ULTRA
Financial Systems Inc.
P.O. Box 3938, Breckenridge CO 80424
hone: 970-453-4956 Fax: 970-453-2467
Profitably serving the investment community for over 13 years!