S&P 500 Chart

Posted by admin on February 9, 2009

I found the scarriest looking chart today.  I was looing at the S&P 500 moving averages and noticed the huge gap between the 50 day moving average and the 200 day moving average so I decided to lengthen the chart and see how long the last downturn lasted and look at the chart I discovered.

This is the S&P 500

I would be very careful about what I own right now and would have a tight stop in place because if classical technical analysis that I have read holds and we break 800 we will be looking for S&P 200 before it bottoms.  In other words some of the people calling for another depression could be correct.  If you think about the fact that the US government has increased the debt limit by roughly 10% in the last year then some of the dire predictions you have heard could be true.

If you would like to hold your stocks then I would suggest a possible hedge by purchasing the SDS to offset some of your long position.  As always live within your means and have all of your credit cards paid off before you invest.