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S&P 500 Pivots
The market is expected to be weak after the April 15th tax deadline. The major market indexes continue to be trading below their natural support levels: Dow (11,000), Nasdaq (2500), and S&P 500 (1200). As traders rushed to safety the dollar gained as the euro fell due to the continued concerns over Eurozone sovereign debt. This event is pushing the possibility of the Federal Reserve raising interest rates faster than its European counterparts.
The S&P 500 index continued to trade below the 144 and 200 moving averages on the 5 minute chart. The S&P had an intraday high just above the natural resistance level of 1175 before ending lower at the end of the trading day.
The daily chart for the S&P 500 indicates a trend change as it stopped at the 55 Fibonacci moving average of 1166. The index is currently near the 1150 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.
The market volatility index continues to increase as traders sell off from equities.The index which recently hit a 52 week low last month of 15.23 ended the day near 25. On the daily chart the market volatility traded above the 144 and 200 moving averages. These moving averages which were resistance levels yesterday have become support levels for tomorrow. The seasonal trading strategy of ‘Sell in May and go away’ is ringing true.
Summary of Pivot and Technical Levels:
1219: S&P 500 52 Week High
1189: 21 Fibonacci Moving Average on Daily Chart
1187: 8 Fibonacci Moving Average on Daily Chart
1176: 200 Moving Average on 5 Minute Chart
1175: Natural Resistance Level
1172: 144 Fibonacci Moving Average on 5 Minute Chart
1168: Tuesday Previous Low
1165: 55 Fibonacci Moving Average on Daily Chart
1150: Natural Support Level
Thursday Economic Calendar:
Chain Store Sales
Jobless Claims / 8.30 AM EST
Productivity and Costs / 08.30 AM EST
Natural Gas Report / 10.30 AM EST
Speakers:
Tim Geithner / 9.00 AM EST
Ben Bernanke / 9.30 AM EST
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