Quick Take: S&P 500 Eyeing 1375?

By Andrew Nyquist
And here we are again eyeing that that all important S&P 500 toggle at 1375. The only difference this time is that we’re looking down at it as support.  Not only does 1375 represent the 2011 highs and March breakout area, but also the current uptrend line.  Important indeed!

Bulls need this level to hold firm to avoid the vaunted “fakeout” — the breakout that doesn’t hold. But I would venture to guess that just sensing this will bring the bears out of the woodwork for a good ole fashioned bull-bear battle. From a trading standpoint, the S&P 500 recorded an “unperfected” DeMark daily sell setup yesterday. It was unperfected because bars 8 and 9 of the setup didn’t achieve a high above 1414… similar to gaps, I would suspect this eventually gets taken care of, whether next week or later on down the road.

Either way, the sell setup lead to a tradeable dip. For now it’s just deemed a “dip,” but could 3 times be the charm? The current 3 day decline is reminicient of previous garden variety declines (see annotated chart below).  1-2-3, and off to the races again?  Unless and until 1375 is broken, the bulls hold the keys.  Happy investing.


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Trading position in S&P 500 related short index fund SH and SDS at time of publication.

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of his employer or any other person or entity.