Sunday, September 27, 2009

S&P on support

The S&P 500 last week, pulled back to the 21 day moving average(yellow line), after testing the monthly R2 pivot(blue arrows and green line marked R2) at 1074. When the S&P hit the monthly R2 pivot last week, I knew there was an 85% chance that the index would not close above R2, and to look for a little pullback. With the end of month and end of quarter this week, we could rally back up to 1074, and make a right shoulder. If the S&P closes below 1040 this week, look for a fast fall down to the monthly pivot and 50 day moving average @1013. We get new monthly pivots on this Thursday, October 1. Monthly pivots will tell us where to look for support and resistance, for the month.