The markets come into a trading week in a familiar position of the last few weeks, focused on Europe and just below a key technical level. If the S&P500 is going to get back above 1,300 before the end of the year its first task is to sustain above its 200 day simple moving average. Currently at 1,272, SPX has failed at this key moving average two times in as many weeks. A third failure here would be a clear short signal for the bears.
The other focus for the markets will continue to be the action in Italian debt, as well as any other EU nation that starts to see their yields rise (Spain anyone?). An auction of Italian 5-year bonds, which began at 5:00 a.m. New York time, wasn’t very encouraging. The country paid a record yield of 6.29 percent on the bonds. Spain’s 10 year yield also inched above 6% but Italy’s 10 year did manage to stay below the 6.75% level even after the poor auction of 5-year bonds this morning.
If the market is going to solidify this trend higher there is one thing we would like to start seeing on weakness: round number support. The last two weeks has seen two key lows put in place at 1,215 and 1,227. However, we would prefer to see a level such as 1,250 (SPX currently is at 1,263) start to act as support. Finding support a psychologically round number like 1,250 could play a large role in ushering in higher prices for the markets.
Did you know that you can watch Stockhaven trade live in real time?
Learn how to daytrade by watching someone else trade! Watchhimtrade.com is the only site that lets you look over the shoulder of a professional daytrader.
Watch this video now where he shows you how it’s possible to make 100% in just 5 minutes!