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S&P 500
After the Federal Reserve stated it will be purchasing Treasurys to keep the economy recovery on track, worried investors sold off accordingly to the FOMC announcement. The added news of China
As the August volume gets thinner analysts need to look at the charts with a long-term view of the markets. Two weeks ago the markets were trying to break through the January 2010 resistance level beginning around 1125 on the S&P 500. The market made several attempts however fell short and it is currently trading below the 1100 area.
On the daily chart of the S&P 500, the market is currently trading below the 144 and 200 day moving averages after its failed attempt trying to break through the January 2010 resistance level. We expected August to trade below this level due to lack of volume and uncertainty within the markets including the China
The Market Volatility Index or VIX track prices that investors are willing to pay for options on the S&P 500, usually to protect themselves against declines in stocks. Currently the VIX trading at the 144 and 200 day moving averages indicating more risky approach towards investments and assets. The thin trading volume in August magnifies moves on the VIX so markets could be less liquid markets than fear-driven.
The Chicago Board Options Exchange (CBOE) Market Volatility Index 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 when the index is trading above 30.
Summary of Major S&P Pivot Levels
1219: S&P 500 52 Week High
Technical Levels Natural Support and Resistance
1125: January 2010 Resistance Level
1100: Natural Support Level
Technical Levels 15 Minute Chart
1096: 144 Day Fibonacci Moving Average on 5 Minute Chart
1099: 200 Day Moving Average on 5 Minute Chart
Technical Levels Daily Minute Chart
1102: 144 Day Fibonacci Moving Average on Daily Chart
1091: 200 Day Moving Average on Daily Chart
Daily Economic Calendar
Housing Market Index / 10.00 EST
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