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S&P 500 Pivots
The market crashed yesterday as the S&P 500 index fell nearly 50 points. Yesterday sell off nearly took all the gains made in 2010. As traders rushed to safety the dollar gained as the euro fell due to continued concerns over Eurozone sovereign debt. This event is pushing the possibility of the Federal Reserve raising interest rates faster than its European counterparts. However after yesterday crash that does not seem like a viable option.
Points to be aware of going into Friday’s trading include the S&P 500 is currently below its 144 and 200 moving averages (1152, 1159 respectively) on the 5 minute chart however it is above the Friday’s primary pivot level (1120.5).
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 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 hit 32.80 around the same area as one year ago in 2009. 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 seasonal trading strategy of ‘Sell in May and go away’ is currently ringing true.
Summary of Pivot and Technical Levels:
1219: S&P 500 52 Week High
1159: 200 MA on 5 minute chart
1158: Wednesday Previous Low
1152: 144 Fibonacci MA 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
1128: Previous Close
1120.5: Friday Primary Pivot Point
Friday Economic Calendar:
Employment Situation / 8.30 AM EST
Consumer Credit / 3.00 PM EST
Speakers:
Charles Plosser/ 11.30 AM EST
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