Episode 120: The S&P500 is again back below its 50 day moving average (dma)- not a good sign; however, today it did recover much of the morning’s losses closing in the upper 1/3 intraday range. Also, volume has been well below average during the most turbulent trading of the past week. So it’s a 50/50 call as to whether the index breaks down or up this week.
The 100 dma has been a strong support level for this market. Since January, support has only been narrowly breached 5 times. Presently the S&P500 is just below its 100 dma. For right now, that’s the key indicator- if support fails, it will most likely drop to the 200 dma around 2048. [As a reference, YTD the index has never dropped more than 0.75% below the 100 dma.]
Friday is options expiration, which could set the stage for a steeper drop in well above average volume, especially is fears over Greece continue.
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