Day Trading Economic News Analysis: June 25, 2010 Russell Rebalance

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

Annual Russell Rebalance 2010

The annual Russell rebalance occurs on the last Friday of June. The rebalance consists of updating the global list of investment equities and assigning them appropriately to their indices. The additions and deletions of equities to various indices create a spread. Speculators enter the market to take advantage of the spread. However too much speculator activity will cause major reversals as speculators create more supply and demand to the market to take advantage of the price action.

For example: If there is a buy imbalance of 5,000,000 shares of AAPL at the end of the day and there is usually only an average trading volume of 2 million shares then speculators will take advantage of the extra demand. Speculators will buy AAPL shares and have a Market on Close Sell Order to sell to the buyer of the 5 million shares. The profit is made by taking advantage of the price action that occurs.

However if too many speculators enter the market and if the demand of the 5 million shares is equally supplied then there will be extra supply. The original buy imbalance will reversal into a sell imbalance. Market activity for the Russell rebalance begins during the last 10 to 15 minutes of the closing day on Friday, June 25, 2010.

S&P 500 Pivots

Consumer discretionary and energy sectors took a beating due to disappointing earnings and uncertainty over deep-water drilling. The downgrade in the US economy after the FOMC announcement on Wednesday did not help build confidence for traders and investors. This was relevant when the S&P 500 opened below Thursday’s previous low.

Currently the S&P 500 is continuing to trade below all the major Fibonacci moving averages (8, 21, 55, 144). The index rallied mid-day then reversed when it hit Thursday’s previous low and extended lower. We will give examples of stocks that followed the S&P 500 movements and how news was related to those stocks as mentioned on our TraderMongers.com News Feed. 

News broke that Disney was going to open a pet hotel for its visitors. The stock went lower however followed the movement in the S&P by rally to its previous Thursday low before ending near the low of the day.

Sempra Energy had news that it could continue operations in Mexico due to an environment regulation that was eliminated. The stock rallied on the news then fell when the S&P 500 reversed direction. 

Walmart broke through Thursday’s previous lows on lower consumer confidence and continued lower when the S&P 500 reversed form its mid-day rally. 

On the daily chart of the S&P 500, we are trading below the 144 and 200 day moving averages of 1110 and 1087. Do not expect any major movements unless we break out of this trading range.

-         If we break above 1110 then expect the January 2010 resistance levels starting at 1125 to hold back the market during these low volume summer months. 

-         If we break below 1087 then be wary of picking bottoms in the market as we may be expect to go even lower due to the slow down in manufacturing, increasing jobless claims, the European debt crisis, and the fears of another ‘flash crash’

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

The Market Volatility Index is currently between 30 and 25, which usually means that traders and investors are switching from cash to riskier assets such as equities and other financial instruments. We have stated before that we will be within a trading range after the FOMC Announcement.

If the volatility breaks through the 25 level then the markets show an influx of equity purchases. The 25 level is a major level of support for CBOE Market Volatility Index as it is the convergence of the 144 and 200 day moving averages. 

This index must break down below 25 or bounce above 30 for the markets to show a consistent momentum and direction. The index is continuing to stay within a range between 25 and 30 so this range should continue due to the low volume of tradint activity throughout the summer months.

Summary of Major Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance 

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1190: 200 Day Moving Average on 5 Minute Chart

1085: 144 Day Fibonacci Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1110: 144 Day Fibonacci Moving Average on Daily Chart

1088: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

GDP / 8.30 AM

Consumer Sentiment / 9.55 AM

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

Day Trading Economic News Analysis: S&P 500 June 24, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500 Pivots

The Federal Reserve kept short-term interest rates at record lows however downgraded its outlook on the US economy. One of the issues that need to be addressed is ‘shadow-inflation.’ This type of inflation is sneaking into the US economy and slowly hindering economic recovery. The S&P 500 is currently continuing to trade below multiple Fibonacci moving averages on 5 minute chart. After today’s FOMC Announcement the market lower on the S&P 500 index however slightly higher on the Dow Industrials.

On the daily chart of the S&P 500, we are between the 144 and 200 day moving averages of 1110 and 1087. Do not expect any major movements unless we break out of this trading range.

- If we break above 1110 then expect the January 2010 resistance levels starting at 1125 to hold back the market during these low volume summer months.

- If we break below 1087 then be wary of picking bottoms in the market as we may be expect to go even lower due to the slow down in manufacturing, increasing jobless claims, the European debt crisis, and the fears of another ‘flash crash’

The Market Volatility Index is currently between 30 and 25, which usually means that traders and investors are switching from cash to riskier assets such as equities and other financial instruments. We have stated before that we will be within a trading range before the FOMC Announcement.

If the volatility breaks through the 25 level then the markets show an influx of equity purchases. The 25 level is a major level of support for CBOE Market Volatility Index as it is the convergence of the 144 and 200 day moving averages.

This index must break down below 25 or bounce above 30 for the markets to show a consistent momentum and direction. Today’s FOMC announcement stayed within a range between 25 and 30 so most likely we will stay within this range throughout the summer months due to low volatility.

Summary of Major Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1098: 144 Day Fibonacci Moving Average on 5 Minute Chart

1101: 200 Day Fibonacci Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1110: 144 Day Fibonacci Moving Average on Daily Chart

1088: 200 Day Fibonacci Moving Average on Daily Chart

Daily Economic Calendar

Durable Goods Orders / 8.30 AM

Jobless Claims / 8.30 AM

Natural Gas Report / 10.30 AM

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

Day Trading Economic News Analysis: June 23, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500 Pivots

The market continued its slide from yesterday after enthusiasm over China revaluing the Yuan over the weekend faded. Today the energy sector led the way of possible fear after a federal judge in New Orleans blocks Gulf offshore drilling moratorium by siding with the energy industry against the White House. US Existing Home Sales were down 2.2%. This news may have affected the market however everyone could be waiting for tomorrow’s FOMC Announcement.

The technical levels we are currently trading below multiple Fibonacci moving averages on 5 minute chart. Tomorrow’s FOMC Announcement may push the market higher as 11 out of the last 12 FOMC Announcements have ended with a positive S&P 500 close.

On the daily chart of the S&P 500, we are between the 144 and 200 day moving averages of 1110 and 1087. Do not expect any major movements unless we break out of this trading range.

- If we break above 1110 then expect the January 2010 resistance levels starting at 1125 to hold back the market during these low volume summer months.

- If we break below 1087 then be wary of picking bottoms in the market as we may be expect to go even lower due to the slow down in manufacturing, increasing jobless claims, the European debt crisis, and the fears of another ‘flash crash’

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

The Market Volatility Index is currently between 30 and 25, which usually means that traders and investors are switching from cash to riskier assets such as equities and other financial instruments. We have stated before that we will be within a trading range before the FOMC Announcement.

If the volatility breaks through the 25 level then the markets show an influx of equity purchases. The 25 level is a major level of support for CBOE Market Volatility Index as it is the convergence of the 144 and 200 day moving averages.

This index must break down below 25 or bounce above 30 for the markets to show a consistent momentum and direction. Depending on tomorrow’s FOMC announcement either we will break out of the trading range or we will stay within this range throughout the summer months due to low volatility.

Summary of Major Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1111: 144 Day Fibonacci Moving Average on 5 Minute Chart

1112: 200 Day Fibonacci Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1110: 144 Day Fibonacci Moving Average on Daily Chart

1087: 200 Day Fibonacci Moving Average on Daily Chart

Daily Economic Calendar

Mortgage Applications / 7.00 AM

New Home Sales / 10.00 AM

Petroleum Report / 10.30 AM

FOMC Announcement / 2.15 PM

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

Day Trading Economic News Analysis: S&P 500 June 22, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

Over the weekend the Chinese unpegged their currency, which drove investors and traders back into the market. However Chinese exports may become cheaper it does help much when the global economy is recovering.

The technical levels on 5 minute chart shows the index facing resistance breaking through January 2010 levels. These levels start at 1125 and each level above become harder to break especially during these low volume summer months.

On the daily chart of the S&P 500, we are just above the 144 and 200 day moving averages of 1110 and 1087. Do not expect any major movements unless we break out of this trading range.

- If we break above 1110 then expect the January 2010 resistance levels starting at 1125 to hold back the market during these low volume summer months.

- If we break below 1087 then be wary of picking bottoms in the market as we may be expect to go even lower due to the slow down in manufacturing, increasing jobless claims, the European debt crisis, and the fears of another ‘flash crash’

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

The Market Volatility Index is currently below 30, which usually means that traders and investors are switching from cash to riskier assets such as equities and other financial instruments. As we stated yesterday if the volatility breaks through the 25 level then the markets show an influx of equity purchases. Yesterday the index ended at 24.88 resting on the convergence of the 144 and 200 day moving average on the daily chart. It is still too close to call whether investors and traders are ending the markets since the FOMC announcement is scheduled for Wednesday. The markets may have sideways trading awaiting for tomorrow’s announcement.

Summary of Major Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1119: 144 Day Fibonacci Moving Average on 5 Minute Chart

1118: 200 Day Fibonacci Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1110: 144 Day Fibonacci Moving Average on Daily Chart

1087: 200 Day Fibonacci Moving Average on Daily Chart

Tuesday Economic Calendar

FOMC Meeting Begins

Existing Home Sales / 10.00 AM

4 – Week Treasury Bill Auction / 11.30 AM

2 – Year Note Auction / 1.00 PM

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

Day Trading Economic News Analysis: S&P 500 June 21, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The market previously rallied up for the past week in anticipation for Friday’s quadruple witching day. Sideways trading occurred as expiration of contracts for all stock index futures, stock index options, stock options, and single stock futures took place.

This Wednesday on June 23rd we have the FOMC meeting, which will give us a direction on where interest rates will be heading. With jobless claims still high and the economy still recovering expect the interest rates to be kept the same however watch for any indication in the wording once the FOMC announcement is made.

Currently, ‘shadow inflation’ has been on the rise as airlines are adding additional subcharges, telecommunications are increasing pricing, and banks are adding additional fees for maintaining accounts. This type of inflation will erode potential recovery and consumer savings.

Looking at the technical level on the 5 minute chart for the S&P 500 Index, we are currently below the January 2010 resistance level which starts at the 1125 level. Breaking this level could mean a huge push upwards as investors and traders return into the markets. However summer has already started so be cautious of low volume trading days ahead and expect days with quick rallies followed quick falls.

On the daily chart of the S&P 500, we are between the 144 and 200 day moving averages of 1110 and 1087. Do not expect any major movements unless we break out of this trading range.

- If we break above 1110 then expect the January 2010 resistance levels starting a 1125 to hold back the market during these low volume summer months.

- If we break below 1087 then be wary of picking bottoms in the market as we may be expect to go even lower due to the slow down in manufacturing, increasing jobless claims, the European debt crisis, and the fears of another ‘flash crash.’

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

The Market Volatility Index is currently below 30, which usually means that traders and investors are switching from cash to riskier assets such as equities and other financial instruments. If the volatility breaks through the 25 level then the markets show an influx of equity purchases. The 25 level is a major level of support for CBOE Market Volatility Index as it is the convergence of the 144 and 200 day moving averages. This index must break down below 25 or bounce above 30 for the markets to show a consistent momentum and direction.

Summary of Major Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1115: 144 Day Fibonacci Moving Average on 5 Minute Chart

1114: 200 Day Fibonacci Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1110: 144 Day Fibonacci Moving Average on Daily Chart

1087: 200 Day Fibonacci Moving Average on Daily Chart

Monday Economic Calendar

No Economic Numbers Scheduled – Watch European and Asian Markets

3 – Month Bill Auction / 11.30 AM

6 – Month Bill Auction / 11.30 AM

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

Day Trading Economic News Analysis: S&P 500 June 14, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The last two days we had a short covering rally before the weekend. Many believe that the gold rally is over due to deflation hitting the European countries and China’s impending economic slowdown. However gold pushed higher between the months of April and May due to the one million weddings in India. Now that the demand for gold is over, we must look at what will drive gold in the immediate future. Main issue would be safety from the equities and real estate properties. Other vehicles for safety include the dollar and Treasuries.

Next week will be a huge week for the markets as Housing, CPI data, and Quadruple Witching Day approaches. On Wednesday FedEx will report quarterly results and they will also forecast their global trade. Many traders and investors will decide on where to invest their cash. The euro will most likely continue lower due to high unemployment in Greece reaching over 12% while Spain struggles with 20%.

The S&P 500 is currently trading above all moving averages on the 5 minute chart as bears cover their shorts before the weekend. We are currently trading above the important 1090 pivot level. Any trade below this pivot could indicate bears returning to hammer the markets down.

The markets look like staying between the 1050 and 1100 for the low volume summer months. We are currently between the 144 and 200 day moving averages on the daily chart. With a large number of economic numbers due next week as well as Quadruple Witching Day on Friday, where various expiration on financial instruments expire, do not expect a confirmed rally especially throughout these low-volume trading summer months. We still believe that any positive news is considered a temporary rally as move into August which is considered the slowest trading month.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The volatility index is just below the 30 level and there is support around 25 due to the convergence of the 144 and 200 day moving averages on the daily chart.

The low volume in the recent rally and liquidation of mutual fund investors due to frightening instances such as the ‘flash crash,’ European debt crisis and BP Oil Spill expect volatility will return and traders will prey and make money on both ends. Traders will buy when investors are fearful and sell when they are euphoric and confident.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1110: 144 Day Fibonacci Moving Average on Daily Chart

1100: Natural Resistance Level

1090: Important Pivot Level

1085: 200 Day Fibonacci Moving Average on Daily Chart

1081: 144 Day Fibonacci Moving Average on 5 Minute Chart

1077: 200 Day Fibonacci Moving Average on 5 Minute Chart

1075: Natural Support Level

1050: Natural Support Level

Monday Economic Calendar

No Economic Numbers Scheduled – Watch European and Asian Markets

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

Day Trading Economic News Analysis: S&P 500 June 11, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The S&P 500 index is currently trading between these natural support and resistance levels: 1050, 1075, and the 1100. We are also trading above the 200 day moving average on the 5 minute chart at 1073. Do not expect a break below the 1075 level on Friday due to the support levels provided by both the 144 and 200 day moving averages. The markets will most likely trade sideways going into Friday’s trading.

On Thursday the S&P 500 ended the trade just above the 1085 200 day moving average on the daily chart. Expect sideways trading as we push into Friday because we are still below the 144 day Fibonacci moving average of 1111. Until we break above this level do expect a confirmed rally or recovering especially throughout these low-volume trading summer months. We still believe that any positive news is considered a temporary rally as move into August which is considered the slowest trading month.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The volatility index is just above 30.00 as of today so traders and investors may rethink their short positions or continue retreat to safer assets.

However due to the low volume in the recent rally and liquidation of mutual fund investors due to frightening instances such as the ‘flash crash,’ European debt crisis and BP Oil Spill expect volatility will return and traders will prey and make money on both ends. Traders will buy when investors are fearful and sell when they are euphoric and confident.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1111: 144 Day Fibonacci Moving Average on Daily Chart

1100: Natural Resistance Level

1090: Important Pivot Level

1085: 200 Day Fibonacci Moving Average on Daily Chart

1075: Natural Resistance Level

1074: 144, 200 Day Fibonacci Moving Average on 5 Minute Chart

1073: 200 Day Fibonacci Moving Average on 5 Minute Chart

1050: Natural Support Level

Friday Economic Calendar

Retail Sales / 8.30 EST

Consumer Sentiment / 9.55 EST

Business Inventories / 10.00 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

Day Trading Economic News Analysis: June 10, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

Today we got a slew of numbers as well as Ben Bernanke and the Beige Book. Ben Bernanke before the House Budget Committee stressed that housing and labor will weigh on our economy than the ongoing Eurozone deficit crisis. The Beige Book stated that ‘economic activity continued to improve.’

German Chancellor Angela Merkel said the time has come to withdraw the stimulus and learn the lessons from the crisis. This sent the markets lower after being positive on the day. We expected the markets will be in a tight trading range between 1075 and 1100 however the lower the indices trend the trading range decreases has well. We now expect to be within a trading range between 1025 and 1075.

On Wednesday the S&P 500 reached a high just above 1075 before falling back and ending the day at 1056. Tomorrow weekly jobless claims are expected as well as the BOE and ECB announcements on interest rates. Expect the dollar to move accordingly after those numbers are released. Unless any major new announcements the markets should be within a trading range between 1050 and 1075 tomorrow.

Tuesday we had a retracement to the 1050 area which we reached in early February. This second attempt could break this area due to the low volume trading during the summer months as well as the issues facing Europe sovereign debt and the BP oil crisis. We are trading below the 200 day moving average on the daily chart (1085) so expect any positive news to be a temporary rally as the volume dries up as me move along towards August – the slowest trading month.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The volatility index is above 30.00 as of so traders and investors may maintain their short positions and retreat to safer assets.

However due to the low volume in the recent rally and liquidation of mutual fund investors due to frightening instances such as the ‘flash crash,’ European debt crisis and BP Oil Spill expect volatility will return and traders will prey and make money on both ends. Traders will buy when investors are fearful and sell when they are euphoric and confident.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1111: 144 Day Fibonacci Moving Average on Daily Chart

1100: Natural Resistance Level

1090: Important Pivot Level

1085: 200 Day Fibonacci Moving Average on Daily Chart

1075: Natural Resistance Level

1064: 55, 144, 200 Day Fibonacci Moving Average Convergence on 5 Minute Chart

1050: Natural Support Level

Thursday Economic Calendar

BOE Announcement / 7.00 EST

ECB Announcement / 7.45 EST

International Trade / 8.30 EST

Weekly Jobless Claims / 8.30 EST

Tim Geithner Speaks / 10.00 EST

Natural Gas Report / 10.30 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.