Day Trading Economic News Analysis: S&P 500 June 22, 2010
Day Trading Economic News Analysis: S&P 500 June 22
, 2010
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
Over the weekend the Chinese unpegged their currency, which drove investors and traders back into the market. However Chinese exports may become cheaper it does help much when the global economy is recovering.
The technical levels on 5 minute chart shows the index facing resistance breaking through January 2010 levels. These levels start at 1125 and each level above become harder to break especially during these low volume summer months.
On the daily chart of the S&P 500, we are just above the 144 and 200 day moving averages of 1110 and 1087. Do not expect any major movements unless we break out of this trading range.
- If we break above 1110 then expect the January 2010 resistance levels starting at 1125 to hold back the market during these low volume summer months.
- If we break below 1087 then be wary of picking bottoms in the market as we may be expect to go even lower due to the slow down in manufacturing, increasing jobless claims, the European debt crisis, and the fears of another flash crash'
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.
The Market Volatility Index is currently below 30, which usually means that traders and investors are switching from cash to riskier assets such as equities and other financial instruments. As we stated yesterday if the volatility breaks through the 25 level then the markets show an influx of equity purchases. Yesterday the index ended at 24.88 resting on the convergence of the 144 and 200 day moving average on the daily chart. It is still too close to call whether investors and traders are ending the markets since the FOMC announcement is scheduled for Wednesday. The markets may have sideways trading awaiting for tomorrow's announcement.
Summary of Major Pivot Levels
1219: S&P 500 52 Week High
Technical Levels Natural Support and Resistance
1125: January 2010 Resistance Level
1100: Natural Support Level
1075: Natural Support Level
Technical Levels 5 Minute Chart
1119: 144 Day Fibonacci Moving Average on 5 Minute Chart
1118: 200 Day Fibonacci Moving Average on 5 Minute Chart
Technical Levels Daily Minute Chart
1110: 144 Day Fibonacci Moving Average on Daily Chart
1087: 200 Day Fibonacci Moving Average on Daily Chart
Tuesday Economic Calendar
FOMC Meeting Begins
Existing Home Sales / 10.00 AM
4 Week Treasury Bill Auction / 11.30 AM
2 Year Note Auction / 1.00 PM
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