Terry's T: 1360 upside limit for now

Terry's T Theory Update: LINK
T Theory Observations Update for March 23 2008.Last week we saw the S&P break below the January lows as noted in the new PDF daily chart, then reverse to the upside, leaving a standard accumulation low as noted in the chart by ACC. This unique pattern is identifiable by the red rising bottoms in the oscillator at the same time the S&P was making the lower low. Download the PDF file to see the updated daily chart.

Download SRT080320.pdf

This is sufficiently positive to allow a new Short Range T to develop and push the S&P up to overhead resistance. However the current rally is unlikely to be the beginning of the new T. It is more likely that the 55 day MA (now at 1360) will mark upside resistance one more time causing another short downward correction. That new correction is likely to end at the center post low for the new T, after which, the S&P should break above the 55 day MA.

Within a long term decline a good rule of thumb is that rallies rarely ever last for more than 7 trading days, primarily because the buying is motivated by traders rather than investors. Also the overhead resistance tends to limit the advance as selling can be expected once it is reached or penetrated.