Wednesday, January 27, 2010

S&P 500 Bouncing Along Long Range Support at 1085

Like clockwork the market is obeying technicals.  S&P 1085 is *the* line in the sand as we mentioned in the weekly summary.  Game plan remains intact....

On the downside I marked a very obvious support level of S&P 1085. This was the bottom of the "box" (base) the market built over 6 weeks in November/December 2009. If that level is broken, I expect the computers to go into overdrive - certainly the "gap" at S&P 1070 is then in play, as would the probability of a test of the 200 day moving average.

Here is the chart we offered coming into the week....

And updated status....

The low of the day thus far is 1085.54 as every technician on the Street watches the same level.

It remains a market very much at risk.

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