Sand Spring Advisors LLC
Hanging into Presidents' Weekend
February 16, 2005
by, Barclay T. Leib
On the hourly S&P 500 chart above we have drawn Fibonacci bands between the Jan 3rd top and the Jan 24th low, as well as a second set of "stretched" Fibonacci bands down to approximately 1157 -- a potential "natural attractor" target low that yields another nice "fit" to the recent S&P price action.
Overall, the market has recently rallied back a bit beyond the 1200 level that we previously suggested was possible to see on a snap-back, but the S&P still has ample chance to stop right around current levels and leave the Dec 31, 2004-Jan. 3, 2005 high unbroken. This is indeed our prefered call. More specifically, it would not be surprising to see prices hover motionless for two more days into the Presidents' Day weekend, but then collapse on the other side of the long weekend.
If the Jan 3 high is surpassed, we will be generally confused, and worried that a last vault to 1260 may be under way. This is possible, but not a path we really expect. We believe that the Dec 31, 2004 cycle date was simply too important for such.
In addition, while the S&P has experienced quite a kick higher in early Feb., the Interactive Week Internet Index has barely been able to gain any ground, and remains a clear "Three Peaks & Domed House" topping formation in the process of completing itself.
Our next Subscriber-only article is currently being prepared for release this weekend.
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