Day Trading Economic News Analysis: S&P 500 May 19, 2010

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

S&P 500 Pivots

On Tuesday all the major indexes were down for the day. ‘Sell in May and go away’ theme was amplified with the European debt crisis, the oil-spill in the Gulf, and the recent 1000 point crash in the Dow Industrials. Commodities are taking a hit as copper is going low and gold is finding ground.

Gold hit a record price in dollars of $1,249 last week. Gold imports have been increasing in India prior to April and May as they prepare for a million wedding ceremonies to be held during that time period. However gold fell short 1.1% falling $13.10 to $1215 as traders and investors are retreating from the markets and finding safety within the dollar. Crude oil is finding similar wear as it is trading around $68 a barrel with the stronger dollar. However crude oil is falling 25% faster than gold according the Dennis Gartman, editor of the Gartman letter.

The S&P 500 index on the 5 minute chart shows a downward trend on Tuesday trading below its moving averages as well as January 2010 support levels. Expect the market to go sideways unless it is given direction by today’s FOMC minutes.

We have told our readers before the S&P 500 is currently undergoing a correction. The seasonal trading strategy of ‘Sell in May and go away’ is currently strong. On the daily chart of the S&P 500 we are currently trading below the January 2010 support level. Expect some support around this area unless the bears take over the market and push the index below the 144 and 200 day moving averages on the daily chart.

The market volatility index measures option activity within the market and is widely used tracking the S&P 500. Increasing volatility implies pessimism within the market and stocks sell off. Currently the market volatility is above the 144 and 200 day moving averages on the daily chart. As long as we stay above this level expect pessimism as we approach the slow summer months.

Summary of Pivot and Technical Levels:

1219: S&P 500 52 Week High

1150: Natural Support Level

1134: 144 day Fibonacci moving average on 5 minute chart

1131: 200 day Fibonacci moving average on 5 minute chart

1127 – 1141

Major resistance level for the S&P for January 2010

1118: 144 day Fibonacci moving average on daily chart

1084: 200 day Fibonacci moving average on daily chart

Wednesday Economic Calendar:

Mortgage Applications / 7.00 EST

Consumer Price Index / 8.30 EST

Petroleum Report / 10.30 EST

FOMC Minutes / 14.00 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 a 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 advice and 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