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S&P 500 Pivots
Criminal probes into Goldman Sachs hurt the financial sector pushing all the major markets into negative terrority. The S&P 500 index ended the day below the natural support of 1200 and finished at 1187. Nasdaq is currently below their current natural support level of 2500 however the Dow finished above its natural support level (11,000) currently at 11,009.
The index broke through Wednesday’s and Thursday’s previous lows and traded beneath the 144 and 200 moving averages on the 5 minute chart. Further actions with regulatory agencies as a result of this probe could cool down Wall Street.
The market is most likely to be weak after the April 15th tax deadline. The S&P index broke through the 1200 natural support level twice last week. As we approach seasonal trading strategy of ‘Sell in May and go away’ we expect the market to have a correction since obtaining gains from early February according to the daily chart.
Looking at the market volatility index (daily chart) which has been trending lower since October of 2008 and recently reached a 52 week low of 15.23 – last week it moved upward touching the 144 Fibonacci moving average twice. The market is looking to sell off due to the uncertainty of the Goldman Sachs probe leading the way for new financial regulations in the near future. Monday offers Motor Vehicle sales, Personal Income and Outlays, ISM manufacturing, and construction spending.
Summary of Pivot Levels:
1219: S&P 500 52 Week High
1217: Friday’s Previous High
1213: Tuesday’s Primary Pivot Level
1212: 200 Moving Average on 5 minute chart
1200: Natural support level
1193: Last Thursday’s Previous Low
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