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S&P 500 Pivots
On Friday the market indexes continued its downtrend stride as economic data is overshadowed by concerns on European sovereign debt due to the PIGS: (Portugal, Italy, Greece, and Spain) as well as the ongoing Goldman Sachs investigation. The S&P 500 index market fell another 17 points in addition to the 50 point crash on Thursday. The continued sell off takes all the gains made in 2010. The euro rose slightly against the dollar as traders who shorted the euro took money off the table before the weekend.
The PIGS crisis is pushing the possibility of the Federal Reserve raising interest rates faster than its European counterparts. However it does not seem like a viable option. Looking at the technicals, Monday’s primary pivot point is 1113. Currently the market is below this pivot point as well as the 144 and 200 day moving averages on the 5 minute chart.
As we have told our readers before the S&P 500 is currently undergoing a correction. It has lost nearly all the gains made in 2010. The index is currently below the 1127 level where it was back in mid January. The market continues to sell off due to the uncertainty of the Goldman Sachs probe leading the way for new financial regulations in the near future as well as the crisis with the European markets. Breaking the 200 day moving average of 1078 on the S&P daily chart would definitely cause a continued slide in the market.
The seasonal trading strategy of ‘Sell in May and go away’ is currently ringing true. The market volatility index hit 40.95 above what the index was last year. The index recently hit a 52 week low last month of 15.23. On the daily chart the market volatility traded above the 144 and 200 moving averages. These moving averages which were resistance levels have become support levels. The index continues to increase as traders sell off from equities
Summary of Pivot and Technical Levels:
1219: S&P 500 52 Week High
1164: 55 day Fibonacci moving average on 5 min chart
1150: Natural Support Level
1127 – 1141
Major resistance level for the S&P for January 2010
1136: 55 Fibonacci MA on 5 min chart
1120.5: Friday Primary Pivot Point
1114: 144 day Fibonacci moving average on 5 min chart
1113: Monday Primary Pivot Level
1111: Friday’s Previous Close
1078: 200 day Fibonacci moving average on 5 min chart
Friday Economic Calendar:
Bank of England Interest Rate Announcement
Speakers:
Ben Bernanke
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About the Author:
Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News
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