SPX Returns to 1100 Key Level June 2
That didn’t last long! The S&P 500 has returned, in a sharp end-of-day reversal, to the key 1,100 level that is the short-term upper resistance line that divides bull and bear.
Let’s take a quick look:
With the exception of the sell-tail of May 25th, the S&P 500 has remained within a 30 point range between 1,070 and 1,100.
Today’s end-of-session reversal took us back to the overhead resistance, which comes from the ’round number’ 1,100 and 200 day Simple Moving Average (1,105).
If bulls can continue the push beyond 1,110, then we’re likely to see a move back to 1,150 to play the ‘will the resistance hold’ game again.
Daily volume is falling back to normal levels – volume has spiked during sharp sell-off sessions. The average seems to be the 4 billion shares per day level – which is exactly where we were today.
Without getting too complicated – the key short-term levels to watch remain 1,100 and 1,070 – particularly for intraday traders.
The sharp rally today that busted the morning divergence led to a rush of stop-losses being triggered by the short-sellers… called “Popped Stops.” We’d expect this same ‘short-squeeze’ style move to continue if bulls can pull the index back above 1,100, and then beyond 1,100.
Keep these levels in focus going forward!
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
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