Broad buying in light volume gave stocks strong gains, but the effort failed to take stocks through a key resistance level. S&P 500 runs into resistance at 1100 line. Stocks performed robust gains for the entire session. They finished with their best percentage gain in two weeks, strength actually faded into the close. The late drift came after the S&P 500 failed to penetrate the 1100 line. It did manage to close firmly above its 50-day moving average of 1088, however.
The S&P 500 Index ended the day up 13.2 points, closed at 1092.54, after peaking at 1100 in afternoon trading. This region could prove to be a stubborn technical roadblock during the short term; not only does 1100 represent round-number resistance, but the SPX's 10-day and 20-day moving averages are forming a bearish cross near 1105.
Internal indicators are oversold, but not at the extremes of May or early July. August, September and October are the most bearish months for stock market. The path of least resistance is "DOWN". Since I missed the best chance to short this market at prior high at 1128, I need more patient to wait for the market to come to me. Hopefully, the next few sessions will boost up the market near or exceed the prior top.
It may be the last chance for you to sell your long holding if the market will continue its last gasp of rally in next few days. Next resistances will be the 200 days moving average 1116, and the prior resistance 1120-1125. We have to watch the market reaction at these price levels very careful. If market hits this resistance and retract, then you can tell for sure market will enter into a bearish mode. And I also expect the SPX take out July low 1010 before the Sept/Oct period over.
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