Tuesday, May 19, 2009

All About SPX 900

Tuesday the markets started off strong but again on low volume and finally the end of day fade came in and sellers pushed the SPX down to 908. So we didn't form the most bullish candle on the daily but there is some support below here at 900. That is the level I will be watching mid week to determine if this recent pop is a fakeout or not. My gut tells me we could see further selling and a retracement back into the 850s. But I will let the charts tell if that gut is correct.

On Wednesday the pivot on the ES futures is 908.25 and price is a bit below that tonight so I would think that level, combined with the resistance from the last hour selling today, could prove to be a ceiling for now. On the downside I think if we break 900 then a gap fill down to 885 is likely. Below that and this market is probably going to grind a bit lower; but I do not think it will be sharp, rather a slow grind. On the other hand if this price breaks above the pivot then all bets are off to the downside.

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