Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!
S&P 500
The market recovered from Tuesday’s losses pending home sales and motor vehicle sales pushed the market higher. Ford sales increased by 22% and General Motors also had an increase up 32% in May compared to the poor showing the industry had last year. April pending home sales jumped 6% due to the tax credit for first-time home buyers.
Majority of global markets have fallen below their 200-day moving averages while the
November 2010 is mid-term elections which are usually the worst year for equity markets. However considering what we have been through in 2008, this year may not be as bad as we may expect. The S&P 500 finished just below the 1100 resistance level and above the 144 and 200 day moving averages on the 5 minute. The 1086 is the 144 Fibonacci moving average while the 1090 level is a major pivot level. Tomorrow expect the markets to break through 1100 area or fall back between the 1086 and 1090 pivot levels.
As we approach the summer season expect low volume trading. The S&P 500 index is currently trading below the January 2010 resistance level and holding just above the 200 day moving average on the daily charts. Unless we break through the January 2010 resistance level which is highly unlikely due to low volume trading expect the markets to trade below this area.
The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) 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.
As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The index is at the 30 mark so traders and investors may be inclined to switch to equities and cover their shorts.
Summary of Pivot and Technical Levels
1219: S&P 500 52 Week High
1114: 144 Day Fibonacci Moving Average on Daily Chart
1100: Natural Resistance Level
1090: Important Pivot Level
1087: 200 Day Fibonacci Moving Average on 5 Minute Chart
1087: 144 Day Fibonacci Moving Average on 5 Minute Chart
1085: 200 Day Fibonacci Moving Average on Daily Chart
1175: Natural Support Level
Thursday Economic Calendar
Chain Store Sales
Jobless Claims / 8.30 EST
Productivity and Costs / 8.30 EST
Factory Orders / 10.00 EST
ISM Non-Mfg Index / 10.00 EST
Natural Gas Report / 10.30 EST
Petroleum Report / 11.00 EST
Ben Bernanke Speaks / 11.15 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 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 offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.
