Thursday, January 29, 2009

830 is Make Or Break

Thursday was a ugly day from the nasty econ data premarket. Gapped down and stayed down closing near the lows. The gap from yesterday filled and even gave us a nice bounce but that then faded and proved to be a nice short entry near 850 resistance.

I think 830 SPX is key support to see whether we continue the recent rally or go make new lows. 830 is the 61.8% retracement of the recent rally from last week. If we break 830 then I think we could be in trouble and headed back below 800. But for Friday it should be a choppy day in the 830s-840s as the bulls and bears play tug of war in that ambush zone.

The pivot point for Friday is 847. If we open up above that level then I want to be looking for a test of the pivot and go long. I wouldnt be surprised if they try to push it down into the 830s before any rebound rally but if we lose the 830s then watch out below. If we have trouble holding the pivot then we could go back into the 830s and I'd be looking for short entries beneath that pivot.

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