Today I give an overview of the last day of the month and its importance to the shorter term plays. The bulls seem to stay in control in this market but then lose their grip when a close above resistance lines need to be made. The bears, put the minimal amount of effort required to close below strong resistance lines, and thus a more bearish sentiment should start forming pretty soon. A monthly candle close below 875 on the S&P definitely vows for the bears, although it doesn’t necessarily mean that there is no more upside from here. I explain my trades for the day, and give people a nice SRS options trade. I also look at the Dow Jones industrial chart, GS, XLF, SRS and SPY.
Regarding GS. I found this chart out in blog land. GS is approaching multi year prior support now resist lines that should be very strong. If GS is the leader of financials as many of us assert, this pretty much shows that financials don’t have much more upside unless this line breaks and confirms. If that happens then I guess you can throw a bull suit on me. I highly doubt that happens, especially not if this is just the start of a primary 2 wave as the bulls say we are in.
http://www.screencast.com/users/erikdbrucker/folders/Jing/media/fc43dd50-4dfe-4e30-b673-38175059575e
Also, if you run fib retraces from the prior 2 rally highs (1007 and 943) you will see we are at a strong fib area on the daily. From the 1007 high to low is the, 877 is the 61.8 retrace and 943 to the low, 884 is the 78.6 retrace. We have not yet had a close over these areas.
Note to self, must spot check more often before hitting submit comment
Yeah got to be careful with the front page. You can’t delete and resubmit your comments.
hey idan –
888 stuck out to me – it was the the trendline off the lows from the two swings before the 666 low (on 11/21/08 at 735 on futures to 2/4/09 at 804 on futures)
nicked it right at 885.75 on futures today
(just mention because you said you saw no reason for it to be strong resistance)
yeah i saw you mention that… great eye.