S & P 500 Correction or Rejection?

S & P 500 Chart, Daily Bar, March 30


What to watch:

• Half way back price is 833. This is an important technical retracement point.
  
• The green line (the midpoint) is 756 and rising. Tomorrow it should be around the 764 area. The market should find good support at the line.
  
• The first major support area is 740-752. From previous up and down moves.
  
• The small gap from the opening is troublesome, and needs to be closed.

The S & P 500 is at a major turning point. I wrote earlier about the importance of establishing support below the market. This test of support is happening now. If the uptrend is good, this support will hold and the market will return to the upside resistance in the 825 area. If the market falls below 740 a test of the lows would be indicated.

It is always easier to be bullish once the market starts to establish support. This lets you know that there are willing buyers on in waiting.

I still favor the upside. But, it really is a coin toss right now.

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Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

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Chart S an P 500 Support 652 and dropping--March 9

We are using the S and P 500 March futures contract this morning.

Support continues to decline and is now around the 652 area. Price drops more than one percent below this level should find good support today.

There is good news as the momentum behind the downside thrust is slowing. However, the market is still subject to a potential downside market capitulation at any time. A hard downside thrust, or continued slow deterioration is likely to trigger mutual fund selling.

Many forecasters are calling for a low around the S and P 500, 600 level. This almost seems like a self fulfilling prophesy coming to fruition. Maybe, maybe not.



Source: Barchart.com

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Bob DeMarco is a citizen journalist, blogger, and Caregiver. In addition to being an experienced writer he taught at the University of Georgia , was an Associate Director and Limited Partner at Bear Stearns, was CEO of IP Group, and is a mentor. Bob currently resides in Delray Beach, FL where he cares for his mother, Dorothy, who suffers from Alzheimer's disease. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. His content has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

More from All American Investor

• Systemic Risk Defined--Too Big to Fail


• Ray Dalio on the current state of affairs in the market


• Roubini Predicts U.S. Losses May Reach $3.6 Trillion


• Six Errors on the Path to the Financial Crisis


• Who Caused the Financial Crisis?


• Option ARM--The Toxic Mortgage


• Debt Binge--The Perfect Financial Storm


• Warren Buffett's Annual Letter to Investors (Cliff Notes Version)

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