SPX Technical Analysis

Head-and-Shoulders Bottom (HSB) in SPX Intraday Chart.

The SPX broke above NL confirming a HSB. This pattern implies a minimum move to SPX 985 which has now become our target for a year-end rally. The 985 level is also the top of what appears to be a downtrending channel that is setting up.

Patterns in intraday charts are not as reliable as daily/weekly charts but they still have some predictive value. If the SPX can stay above NL for the rest of this week, we're going to feel very good about our current long position for the rest of 2008. If the SPX runs to 985, there's a good chance we'll choose to take profits which will be over 20% in Rydex Nova.

Sincerely,
Steve Hunter, ULTRA Financial Systems LLC