The 1100 Level on the SP500 May 27

May 27, 2010: 2:42 PM CST

From one expected price level to the next – that’s how short-term trading works.

Right now, we face the next key level to watch – overhead resistance – at 1,100 and so we play another round of “will it break or will it hold.”

Here’s  a quick update:

The 1,100 level is ’round number’ resistance which also forms a confluence with the rising 200 day simple moving average.

A break above this level puts the balance back in the bullish camp, and makes this brief time under the average a mean whipsaw for the bears.

Of course, as I mentioned earlier, any solid break under 1,040 officially reverses the trend from up to down… definitionally speaking, we are still technically in an uptrend while we’re above 1,040.

A quick look at pre-end of day market internals – Breadth and Volume Difference – show bullish potential:

The 5-min S&P 50 Chart above shows the consolidation range between 1,070 and 1,090 which has developed over the last few days.

Breadth formed a new chart high yesterday in the morning session, which has continued into today’s session – that’s a bullish sign.

VOLD – volume difference of advancers and decliners – also broke out yesterday, but did not form a new chart high.  That distinction was made on the May 21st rally.  Not super-bullish, but a good sign that VOLD is registering positive 1 million shares right now.

So a break above 1,100 sends the upper target to 1,120 at a minimum and then a possible short-term target back to 1,150.

On the other side of the “If/Then” assumption, a failure for bulls to overcome 1,100 would likely send us back down to test 1,050, but from the looks of internals, the bulls have a good shot of breaking above 1,100.

Let’s see if they do.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

3 Comments

3 Responses to “The 1100 Level on the SP500 May 27”

  1. Deb Ghosh Says:

    Nice post Corey..S&P closed just below MA 200 but we are above 1100. But SPY, Nasdaq both closed above MA 200 except S&P and Dow. Edge is in favor of bull after today's run up..But lot of things might change overnight..Lets see

  2. theyenguy Says:

    The 1,100 level provides very strong resistance as it is the middle of a “broadening top pattern” that goes back to late January.

    A lot depends on the strength and follow through of the Euro and overnight trading in stock market trading in Asia
    http://finance.yahoo.com/q/bc?t=5d&s=EURUSD%3DX

    It really was an awesome day for the Bulls as the bounce up in the Euro blasted oil, base metals, and European stocks higher; for a full report; click on the link below
    http://theyenguy.wordpress.com/2010/05/27/rise-

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