logo
  Join        Login             Stock Quote

Watching The Key Short Term Pivot In The SP500 To End November

 November 27, 2012 03:02 PM


As we transition to December soon, let's take a look at the critical level to monitor in the S&P 500 to determine our trading strategies as December approaches.

Here's the top-level Daily Chart with key level highlighted:

Cutting straight to the point, the Key Inflection Level is 1,410 which reflects the confluence of the following:

  • Falling 50d EMA (1,408)
  • Price Polarity Level (Highlighted near 1,410)
  • 50% Fibonacci Retracement (1,409)

There are of course other factors that align at the 1,410 index level but we'll focus on these three.

[Related -Health Net, Inc. (HNT): Potential to Be Huge Winners Says Bank of America]

In trends, the 50 EMA tends to be a "Line in the Sand" that holds as price retraces to this level.  Breakthroughs beyond the 50 EMA tend to signal potential trend reversals, not continuation.

For reference, the Short-Term (Daily) Trend is DOWN as evidenced by the series of lower highs/lower lows and the bearish moving average orientation (20 under the 50).

When referring to "Price Polarity," it refers to the longstanding charting principle:

"Prior Support Often becomes Future Resistance."

The highlighted line reflects the "Polarity" of both Support and Resistance at 1,410 where price trades now.

Finally, we have the 50% Fibonacci Retracement as drawn on the Hourly Chart:

[Related -HomeAway, Inc. (AWAY) Q2 Earnings Preview: Top and Bottom Line Bullish Surprise?]

From the September high of 1,474 to the recent November low at 1,434, we observe the 50% half-way point intersects at 1,409.

This post is intended to be a quick overview of three factors that highlight the importance of the 1,410 level.

Logic would suggest that price retrace lower from this level but as traders, we must be able to adapt in real time IF instead buyers continue to push the market above 1,410 on this upward swing.

An inflection point gives us a roadmap for planning our short-term strategies according to what actually happens in real time.

A "logical" expectation would be for price to stall and trade lower from here (bearish intraday/swing trades if so toward 1,390 at least).

An "alternate" outcome would be that price instead breaks firmly above the 1,410 inflection/pivot level which would likely result in a new wave of buying pressure (especially from short-sellers who entered short into this level and are forced to buy-back to cover).

A breakthrough above 1,410 would not just trigger buy-to-cover orders from the bears; in addition, sidelined bulls could step back into the market with fresh breakout buy orders along with other traders adding to existing positions for a breakout opportunity.

Continue watching this level throughout the day and the remainder of the week and adapt accordingly.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageChipotle Mexican Grill, Inc. (CMG) Q2 Earnings Preview: Will Higher Traffic Offset Higher Costs the Key

Chipotle Mexican Grill, Inc. (NYSE:CMG) will host a conference call to discuss second quarter 2014 read on...

article imageNetflix, Inc. (NFLX) Q2 Earnings Preview: The Ruby Month for a Reason

Netflix, Inc. (NASDAQ:NFLX) will post its second-quarter 2014 financial results and business outlook on its read on...

article imageLadenburg Thalmann Financial Services (NYSEMKT:LTS): Heavy, Durable Insider Buying

Ahh, but any worries over price levels didn’t stop multiple insiders at Ladenburg Thalmann Financial read on...

article imageInternational Business Machines Corp. (IBM) Q2 Earnings Preview: Small Beat and Pop

International Business Machines Corp. (NYSE:IBM) will host a conference call Wednesday, Jul. 16, 2014 at read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

The SEC Does Some Things to Money Market Funds
More Articles on: Index



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.