Day Trading Economic News Analysis: S&P 500 June 7, 2010

Day Trading Economic News Analysis: S&P 500 June 7

, 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

On Thursday the S&P 500 ended the day above 1100 and traded above all the major Fibonacci moving averages (8, 21, 55, and 144) on the 5 minute chart. After disappointing jobs report on Friday, the markets went into full reverse and ended at the low of the day. Traders and investors sought safety in the dollar as fears of Hungary's debt situation mounted and the euro fell to the lowest level in four years.

The S&P 500 broke through two natural support areas (1100 and 1075) on Friday. The volume indeed for a rally is decreasing as we progress into the slow summer months. Do not expect the index to break above 1075 area on Monday due to the low volume. Currently we are trading below the 144 and 200 Fibonacci moving averages on the daily chart.

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 volatility index is above 30.00 as of Friday, June 4th so traders and investors may maintain their short positions and retreat to safer assets.

However due to the low volume in the recent rally and liquidation of mutual fund investors due to frightening instances such as the flash crash,' European debt crisis and BP Oil Spill expect volatility will return and traders will prey and make money on both ends. Traders will buy when investors are fearful and sell when they are euphoric and confident.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1113: 144 Day Fibonacci Moving Average on Daily Chart

1100: Natural Resistance Level

1086: 200 Day Fibonacci Moving Average on Daily Chart

1082: 200 Day Fibonacci Moving Average on 5 Minute Chart

1081: 144 Day Fibonacci Moving Average on 5 Minute Chart

1090: Important Pivot Level

1175: Natural Support Level

Monday Economic Calendar

Consumer Credit / 15.00 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 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.

POST COMMENT

Be Stylish And Economical With Costume Jewelry Economic condition of Denver Marcus Asay and Economic Development Marcus Asay An overview About Chinese Economic Development Marcus Asay Learn How Power Consumption And Economic Development are Related Career opportunities in the field of economics Planning and Planting Vegetables in Your Landscape Economically The economic downturn in this year Is there any Total Economic Collapse Coming? Economics Affairs of India and World - Some Few Facts China lowers its economic growth target a tad In An Economic Crisis - No Room For Fear India's Budget: No Respite on Prices Despite High Economic Growth