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Bears can hold a close at the lows

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With just under 45-minutes left to go in today's trade, the major indexes have sunk back near their lows into the close, and I wanted to quickly try and update bearish traders that may be monitoring the S&P 500 Index (SPX.X) 803.55 -0.48% as it now looks to close in the lower "support range" we discussed in last night's Index Trader Wrap.

S&P 500 Index Chart - Daily Interval

From observations made today regarding the S&P Banks Index (BIX.X) 269.67 -1%, I would think a bearish trader in the SPX should consider holding bearish positions overnight at current levels, but do so when considering risk to a stop at 813, which would be just above our WEEKLY S1 level of 809.30 from the pivot matrix. I wanted to show the above chart (weekly retracements are blue and MONTHLY retracements are red), as it relates to last night's Index Wrap, as tonight I'm going to revisit our point and figure chart of the SPX and test my "suck-em in and spit'em out" scenario we talked about last week. Should the SPX lose the 801 level from MONTHLY retracement, I see the SPX as being further vulnerable to 789, which is our WEEKLY S2 level of support.

My MAIN reason in this thinking is the weakness we saw in the S&P Banks Index (BIX.X) today and lackluster bullishness when the major indexes tried to rally after today's wholesale inventory numbers.

Jeff Bailey

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