From Bloomberg:
The Standard & Poor's 500 Index is poised to extend this year's 42 percent drop after a rally from last week's five-year low lasted just one day, say analysts who study charts of trading patterns and prices to forecast changes in stocks.After rebounding 11 percent Nov. 13, the benchmark index for American equities slipped 6.6 percent during the last two days and will probably keep falling past 818.69, its lowest level since 2003, according to three top-ranked technical analysts. The S&P 500 declined below its Oct. 10 low of 839.8 before rallying last week, making it a ``retest'' to chart readers.
``Historically you would've had a better charge from the bulls at this point, and it hasn't developed,'' said Jeffrey de Graaf, a senior managing director at ISI Group Inc. in New York, in a telephone interview. ``The buyers haven't presented themselves in a meaningful way to show that there's a sustained move to the upside, so the concern is that you just drift here.''
The 11 percent trough-to-peak gain in the S&P 500 on Nov. 13 was one of six ``key reversals'' in the past 40 years, according to de Graaf, who defines the term using intraday levels and moving averages. Its 4.2 percent retreat a day later was the worst showing after such a turnaround by a factor of seven, he said.
Technical Analyst
De Graaf, the highest-rated technical analyst in Institutional Investor magazine's survey the past four years, said other indicators suggest stocks will keep falling....MORE
