Wednesday, September 15, 2010

S&P 1116 Remains the Key Pivot Line

More signs of weakness in the economy via corporate warnings - Nucor and Steal Dynamics in steel, and Beazer in housing.  Obviously two cyclical industries... these 2 along with semi's have shown weakness in the fundamentals the past month or so.  The market continues to ignore this data as all that matters are if China is buying some copper or the algorithms staring at squiggly lines on charts.

The fortress level the past 3 days has been S&P 1116, which is the 200 day simple moving average.  What was once resistance is now support - of course courtesy to our Monday morning gap up, as this level was not able to be breached during normal market hours.  The past 2 days for quick and nimble traders, all purchases at S&P 1116 have been rewarded with quick scalps.

It's a very simple market right now.... 1116 is the squiggly line.  Buy without fear above it, shake in trepidation below. .  As long as it holds, bulls reign.  If it breaks the gaps in the S&P chart come into play.  Economic data, earnings warnings, blah blah... respect the squiggly line analysis.

p.s. Greenspan came out again this morning saying the best stimulus is a higher stock market. (wink wink to the 'urgent buyer' who shows up 8 out of 10 premarkets)

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