SPX End of 2nd Quarter

With today's closing of the SPX below the 1040 level of support, we officially can say that we are in a bear market.
Also today was the last day of the 2nd quarter, and the majority of the institutional investors during their "window dressing" they sold their holdings, which helped to the downturn and corroborated that they weren't interested in holding positions in this type of market.
As I mentioned yesterday, also notice that the 50 day moving average is closer and almost ready to cross the 200 day moving average, which is major sign for technical analysis.
The next level of short term support is 1010 and resistance now is 1040
Looking at the bigger picture, there is nothing to really hold this market until around 875 - 900

SPX Sell Off

The market selling continued today, as the S&P opened this morning with a 15 point gap to the downside and didn't stop until reaching 1040 which was the previous lows from February, May and June.
And area of concern is that the 50 day moving average is quickly approaching the 200 day moving average and we all know what a death cross means for the market.
Next level of support is at 1010 and resistance at 1050
Watch for more end of quarter window dressing volatility tomorrow.

Wisdom

The market is the ultimate arena.
As traders we do battle with other market participants every day.
As traders we do battle with ourselves every day.
Our toughest opponent is our self.
It’s one thing to have a set of rules, it’s another thing to master ones personal psychology, to have the discipline to follow our rules.

SPX analysis for 6/25/2010

The market had a rough week, ending down 3.5% for the week.
Today the S&P sold off early on the trading session, posting a new low for the week at 1068, before the internals turned around and the index rallied 15 points to 1083.50 where it found resistance.
Today was the index's first green day for the week as is showing some form of stabilizacion, but still couldn't close above the 20 day EMA.
Support and resistance levels remain the same at 1040-1050 on the way down and 1100 to the upside.

SPX analysis for 6/24/2010

The market continues to lose ground as the selling took the index down 18 points to 1073.69 closing below the 20 day moving average.
The next level of support is at the 1040 - 1050 area, resistance levels are at 1090, then at 1100 and 1110 at the 200 day moving average.
The bulls should defend the 1040 area level of support, otherwise 1020 is next and 1000 after that.

SPX analysis for 6/22/2010

Yesterday's huge market gap up and sell off afterward, draw some nasty candles on the SPX chart, setting the pace for today's action.
The market broke the 10 day uptrend line and closed below the 200 day moving average, opening the doors for more selling if the bulls don't recapture 1110.
Initial support is at 1070 level and then around 1050 - 1040, resistance once again is at 1100 where the 20 EMA and 200 day moving averages meet.

Wisdom

Using Technical Indicators vs Trading Based Purely On Price And Volume Charts

The debate among traders over advantages and disadvantages of using indicators will never cease. There is no correct answer or absolute truth regarding the use of indicators. It all comes down to your personality and the way you see the markets.
Some traders plot Bollinger bands, OBV (On Balance Volume), plenty of moving averages and Fibonacci retracements on their charts. Then they tried to be even smarter and then added MACD, Stochastics, RSI, ATR and ADX to the mix. You get the picture. They ended up with ‘Spaghetti Charts’. You take a clean chart and literally throw spaghetti onto the chart until it becomes completely unreadable. The result is the well known ‘analysis paralysis’.
While I can’t seem to trade based only on Price and Volume Charts, some traders seem to be able to pull money out of the market with this approach.
The solution is to keep things simple, the fewer the better, use what works for you, a couple of indicators should do the trick.

SPX before Quad Witch day

The market had too many bad news to digest this morning as the CPI, Jobless Claims, Current Account and Philly Fed Survey all came worse than expected, but the one that really set the tone for the opening was the Philly Fed Survey which came 62.6% worse than the previous month.
The SPX sold off right at the opening to a low of 1105.90 before founding support, that was 8.75 points from yesterday's close at 1114.60 and stayed red most of the day in a range between 1106 and 1114, but the market managed to rally in the last 30 minutes of the trading session to close positive and for the third consecutive day above the 200 day moving average, creating a 10/20 simple day moving averages "mini" golden cross.
Interestingly enough the ADX is not participating with this move which tell us that the uptrend is no strong enough.
For tomorrow's quadruple witching day we can expect a very volatile day, so trading with smaller positions than usual would be the safe way to go.

SPX Analysis for 6/15/2010

The market opened with a gap up and the bulls kept it going for a 20+ point gain, closing at 1115.23
Right now the market is at a major inflection point where the buyers and sellers will be watching their next move.
We have the 200 day moving average at 1108.50, the 38.2% Fibonacci Retracement from May and June lows and Resistance level around 1105-1108
If buyers exceed sellers and push the price above 1110, we will most likely have a short squeeze as sellers will run to cover their shorts, on the other hand if sellers exceed the buyers and push the price below 1110, the buyers stops that were expecting a breakout above 1110 will trigger and help push the index down.
Major Support is at 1040 and Resistance at 1150

SPX Analysis for 6/14/2010

After opening with a nice gap to the upside, the market had an early run to 1106, breaking momentarily above the resistance level of the 200 day moving average around 1100, this is the 3rd time in 3 weeks that the market tests that level of resistance, and history has showed us that when a level of support or resistance is tested frequently, at the end it gives up. Unfortunatelly the sellers stepped in around noon time triggering a sell signal at 1104 to short the market for a nice multipoint gain do the downside. The SPX closed red for the day below the 200 day moving average at 1089, but above the downtrend line.
Resistance continues to be the 200 day moving average at 1101 and support around 1040-1050

Wisdom

In bull markets the market climbs “a wall of worry” and in bear markets it slides down a “slope of hope”.

SPX Rally

Not much to say, other than that the market opened with a 20 point gap for whatever reason and that it was sustained for the rest of the day, even closing into strength at 1087 right into the descending upper trend line for a 30 point gain from yesterday's close.
A very nice run that could open the road to the 1100 resistance level at the 200 day moving average if the bulls can keep the momentum going.
The market is right in between 1040 bears and 1100 bulls territory, let's see if it can resolve to either side, so that we can return to a more normal trading environment.

SPX Analysis for 6/9/2010

The market closed on strength yesterday and today opened with a gap up that continued running until around 1077 where the S&P encountered an area of congestion that is clearly seen in the 60 minute chart.
The bulls gave up and the sellers brought the S&P down 20+ points to close at 1056
Regardless the morning run was good for 12 points + 20 points in the afternoon sell off, that's 30+ points to play.

SPX Analysis for 6/8/2010

The S&P traded in a range between 1040 and 1058 ending the day at 1062 up 12 points.
Support at 1040 was sustained and defended by the buyers but it's also interesting to see that the index is trading at a level 5% below it's 200 day moving average and the last time that the S&P broke this level of support was in January of 2008
Another observation is that the 200 day moving average trend line started to decline which is a bearish sign.
Support still is at 1040 and resistance at 1100 where the declining 20 and 200 day moving averages meet.

SPX Analysis for 6/7/2010

The market had another rough day today as the sell off from Friday continued this afternoon, leaving the S&P close to this year lows.
It looks like the market next area of major support is at the 38.2% Fibonacci retracement of the April highs, which would put the index at 1010, resistance continues to be at the 1100 area at the 200 day moving average.
So far the most profitable trades continue to be shorting the rallies.

Wisdom

Learn from your losses, you paid for them.

SPX back in correction

The market didn't like the negative Employment numbers and lost 40 points closing at 1064.88 back in correction territory.
The 1100-1106 resistance area proof to much to break, as there are several levels of resistance together.
Coincidentally the 200 day moving average at 1103, the descending 2o day moving average at 1108 and the upper downtrend line at 1100 were a big wall for the market as it kept breaking support levels all day, first at 1085, then 1070.
From here support now is at 1040 and resistance in the 1100 - 1105 area.

Market Oversold

A look at the NYSE % of stocks above their 50 day moving average, indicates that the market is short term oversold.

SPX 6/2/2010

Well, the market rallied all day long and ended up almost at the 1100 level, if we can break 1100 and keep it up, the bulls have a chance to claim back the 200 day moving average.
Support is at 1070 and resistance at 1105
Basically today's rally was a short squeeze that kept triggering short sellers stop losses.

S&P 500 6/1/2010

The market remained weak most of the day, unable to regain the 1100 level, selling off late in the session closing at 1070.
1085 was the level to maintain the short term uptrend and was broken today, so the odds again benefit the bears.
Also notice that the 50 day moving average is beginning to turn down and that could mean a possible death cross in the days ahead.
Resistance is at the 200 day moving average which coincidentally meets the upper downtrend line around 1106