The high in January 2010 was $115.14, which was only slightly below the monthly R2 at $115.17 (point 7). By the end of the month, the quarterly pivot level was broken and the next week SPY reached the quarterly S1 at $104.60 (point 8), the low as $104.58.
By the middle of February, the SPY was back above the quarterly pivot. Just a month later, the quarterly R1 at $115.66 was overcome and the high that month was $118.17.
The SPY opened the 2nd quarter of 2010 at $117.80, which was above the new quarter’s pivot at $113.41. By the end of April, SPY made a high at $122.12 (point 9) that was just below the quarterly R1 at $122.25. The flash crash on May 6 took the SPY back below the quarterly pivot and the S1 at $108.16 was also exceeded. The 2nd quarter low was $107.15 but this was still well above the quarterly S2 at $99.32, point 10.
Of course, the same methodology works on any market, and next, I would like to take a brief look at crude oil from the last quarter of 2011 through the 2nd quarter of 2012.
Crude oil opened the 4th quarter of 2011 at $78.92, which was below the quarterly pivot of $86.15, so going into the quarter, based on the pivot analysis, the trend was negative. On October 15, crude oil closed above the quarterly pivot (point 1). As I had discussed on October 11 Has Crude Oil Finally Bottomed?, the OBV had broken its downtrend, line a, and the same week crude oil closed above it’s quarterly pivot (point 1).
With crude above its quarterly pivot the focus was on the quarterly R1 at $96.60, which was exceeded in the middle of November as the high was $103.37. This was well below the R2 at $111.06. The pullback in the latter part of December took crude oil back to $93.31 (point 2), but it held above the monthly S1 pivot support at $91.99.
Crude oil opened 2012 at $99.70 solidly above the 1st quarter pivot at $92.38. Crude oil prices drifted lower in January, but bottomed in early February at $95.44. This was just below the monthly S1 at $95.87. On February 23, the monthly R1 at $109.81 was tested, and four days later, was exceeded as the high was $110.55, point 3.
Crude oil opened the 2nd quarter of 2012 at $103.27, but violated the quarterly pivot at $103.00 during the first trading day of the new quarter. For the next several weeks, crude traded above and below the quarterly pivot. Crude surged to a high of $106.43 on May 2, point 4, but then reversed to close the week sharply lower.
The weekly OBV had been deteriorating since late March as it had broken its uptrend, line b. As crude oil was peaking in early May, the OBV just rallied back to its now declining WMA, which was a sign of weakness.
I plan to start regularly providing the quarterly pivot data in my daily stock column so I wanted to look at Apple Inc. (AAPL), which despite its recent slide is still a barometer of the tech sector.
I would like to focus on late 2011 when AAPL was in a trading range that was contained for the most part between quarterly R1 at $418.44 and the S1 at $348.60. As 2012 started AAPL opened at $409.40, which was well above the quarterly pivot at $395.31.
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