As expected SPX stayed pretty much around last Friday close. Granted market had a decent move on the upside yesterday and a even bigger move on the downside today but overall market is almost neutral this week.
The most important even that could trigger a huge move in either direction is the fact that we are very close to SMA 200. As you know computer trading represent a big percentage of the volume we are seeing every day and most computers more likely are programmed to sell or to buy the minute market touches SMA 200. On the first move, I expect market to bounce up as soon as SMA 200 is going to be touched. Usually SMA 200 is a good support level. On a second or third attempt, a move bellow SMA 200 is going to trigger a big sell off.
SMA 200 resides now around 1258 on SPX and 11,730 on Dow.
The most important even that could trigger a huge move in either direction is the fact that we are very close to SMA 200. As you know computer trading represent a big percentage of the volume we are seeing every day and most computers more likely are programmed to sell or to buy the minute market touches SMA 200. On the first move, I expect market to bounce up as soon as SMA 200 is going to be touched. Usually SMA 200 is a good support level. On a second or third attempt, a move bellow SMA 200 is going to trigger a big sell off.
SMA 200 resides now around 1258 on SPX and 11,730 on Dow.
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