Business

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S&P 500

The market struggled to find direction amidst uncertainty weighing on Europe and second quarter 2010 earnings season. Many traders and investors took profits in the morning before the S&P continued its trend just above Friday’s previous high.

Before the second quarter earnings season started the S&P 500 rallied just below the 200 day moving average on the daily chart of 1086. The results of the second quarter earnings could push the market higher if the numbers are better than expected. However any market leader having a bad second quarter could push an industry sector lower while another sector leader rise higher.

For example Walmart could lead the retails sector higher if second quarter earnings are better than expected and the outlook remains positive. However technology giant Apple may suffer lower second quarter earnings and push the other tech stocks lower.

The Market Volatility Index has been active due to the seasonal selling trend of the ‘Sell in May’ philosophy. If the index is above 30 then traders and investors are switching from riskier assets to cash. Lower than 30 especially breaking through the two major moving averages of 144 and 200 means that people are buying riskier assets and financial instruments.  The Market Volatility Index seems to stabilizing after the fourth of July weekend and the anticipation of second quarter 2010 earnings season.

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

 

Summary of Major S&P Pivot Levels

1219: S&P 500 52 Week High

 

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

 

Technical Levels 5 Minute Chart

1073: 144 Day Fibonacci Moving Average on 5 Minute Chart

1171: 200 Day Moving Average on 5 Minute Chart

 

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1086: 200 Day Moving Average on Daily Chart

 

Daily Economic Calendar

International Trade / 8.30 AM EST

Treasury Budget / 2.00 PM EST

 

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