Wednesday, August 31, 2011

SPX technicals

It is very encouraging for traders to see some order returning to market. SPX is trading nice and smooth and is responding to technicals. We pointed out over the last few sessions that 1190 - 1200 area breakout would take us to 1208, and the breach of that would take us to 1220 - 30 area. It has been reached and 1220 and 1230 were the short trigger on both days. Long above 1200 to this 1220 - 30 area with those 3 scaleouts 1208, 1220, and 1230 was the ultimate reward. Now 1230 becomes resistance. Should 1220 not hold as support, quick trip to 1208 is in order, and breach below 1208 sends us to 1200, which better hold, or we go down to 1190. Essentially that would be a round trip. But let's not get too bearish here just yet. Scaleouts and stop trailing on this short is a must.

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