IOM DECEMBER S&P 500 INDEX: Short-term trend up, long-term trend up.

Moving Averages–Positive–5-day 981.39, 20-day 961.68; positive–4-day 982.87, 9-day 972.85, 18-day 964.90; 50-day 948.92.

Oscillators–RSI 61%, stochastic 78/83, MACD 10.08/7.92.

Resistance–992.05-992.25 ** key daily resistance/contract high (10-07-97). Support–971.15-971.35 * key daily support.

Technical Indicators–Daily market momentum remains up above the 971.35 area today. Topping/declining daily oscillators warn of the market's susceptibility to a minor downside correction. Bearish divergence between price and monthly momentum indicators.

Viewpoint–Despite the market's sharp sell-off early in the session, it came back by the end of the day to close in the upper half of the range. Although still susceptible to a downside correction, there is no clear technical indication that any kind of a top is in place. Daily market momentum will remain up again today as long as the 971.35 area loosely contains price on the downside during the session. However, longs are cautioned on a break below 968.75.

CBOT DECEMBER TREASURY BOND: Short-term trend neutral, long-term trend up.

Moving Averages–Positive–5-day 116.19, 20-day 115.23; positive–4-day 116.18, 9-day 116.10, 18-day 115.31; 50-day 114.05.

Oscillators–RSI 50%, stochastic 39/49, MACD 0.71/0.73.

Resistance–117.21-117.24 ** key daily resistance. Support–114.13-114.16 * key daily support/important weekly support.

Technical Indicators–Pivotal price area here the next significant directional move is likely to begin. Bearish divergence between price and daily momentum indicators. Daily market momentum has now turned neutral (from up).

Viewpoint–The market remains in the midst of a minor downside correction within the major uptrend on the daily chart. This major uptrend will remain valid as long as major support at the 114.05 level loosely contains price on the downside. Critical weekly support exists at the 114.16 area this week, and was tested yesterday. If the market is indeed headed higher over the next one to several months as my analysis suggests, this support should provide a new longer-term buying opportunity.

October 10, 1997 John J. Kosar

Greenwich Natwest Futures, Inc.

311 S. Wacker, Chicago, Illinois

Consensus National Futures and Financial On Line Index | Technical Corner Index

Copyright 1997, by Consensus Inc.  All American and Pan American rights Reserved. editor@consensus-inc.com

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