Wednesday, June 23, 2010

Bellow 1,100

Bad housing data and the bears managed to push SPX bellow very important technical levels, SMA200 (1,111), previous highs (1,105) and 1,100 the price where most of the volume occurred since March 2009. Bears didn't seem too confident in the morning when the housing data emerged but by the end of the day they were in total control. We are trading now, again, in the 1070-1105 range. Looking at the daily chart you can see that we traded in 1070-1105 range for over a month with two briefly escapes, one at 1045 and the other at 1117.  Let's see if 1070 holds now!

Looking at 30 minutes charts you can see that price went bellow both EMA50 and EMA100 but it's still above a rising five days moving. So, the intermediary time frame it's still OK. It's very tempting to take a small loss here but I am still holding my few longs until I would eventually get a sell signal (EMA50  crossing EMA100 from above). If I am going to get another sell signal I am out of the market and go fishing since the market most likely will trade in range and the number of false buy/sell signal are going to increase. Keep an eye on 5 days SMA, sometimes this level acts as a support.

Bulls may still have a chance here to push SPX above 1100. It all depends on how this bad housing data is going to be "re-digested" tomorrow and what other European market is going to be downgraded from crappy to junk by Moody. I wonder when is Moody going to downgrade itself since its tracking record prior the 2007 plunge was pretty bad --))


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