subject: Day Trading Economic News Analysis: S&P 500 June 11, 2010 [print this page] Day Trading Economic News Analysis: S&P 500 June 11, 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
The S&P 500 index is currently trading between these natural support and resistance levels: 1050, 1075, and the 1100. We are also trading above the 200 day moving average on the 5 minute chart at 1073. Do not expect a break below the 1075 level on Friday due to the support levels provided by both the 144 and 200 day moving averages. The markets will most likely trade sideways going into Friday's trading.
On Thursday the S&P 500 ended the trade just above the 1085 200 day moving average on the daily chart. Expect sideways trading as we push into Friday because we are still below the 144 day Fibonacci moving average of 1111. Until we break above this level do expect a confirmed rally or recovering especially throughout these low-volume trading summer months. We still believe that any positive news is considered a temporary rally as move into August which is considered the slowest trading month.
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 just above 30.00 as of today so traders and investors may rethink their short positions or continue 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
1111: 144 Day Fibonacci Moving Average on Daily Chart
1100: Natural Resistance Level
1090: Important Pivot Level
1085: 200 Day Fibonacci Moving Average on Daily Chart
1075: Natural Resistance Level
1074: 144, 200 Day Fibonacci Moving Average on 5 Minute Chart
1073: 200 Day Fibonacci Moving Average on 5 Minute Chart
1050: Natural Support Level
Friday Economic Calendar
Retail Sales / 8.30 EST
Consumer Sentiment / 9.55 EST
Business Inventories / 10.00 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.
