We’re not sure if this market has schizophrenia or what but today was a wild ride. After breaking a key technical level (1,250) shortly after the open, the S&P500 quickly cascaded down to its lowest levels of the year. The index traded all the way down to 1,235 before capitulating to close in the green around 1,260 and pushing it back into positive territory for the year.
After witnessing today’s price action in the market we think we may be due for a bounce over the next day or so. However, the damage has been done, the fact is is that key indexes violated key levels today and the risk is for further downside. The S&P500, Russell 2000 small cap, & S&P400 mid cap indexes all broke to new year-to-date lows. While the markets did close green, we our now in the camp that rallies will be sold as previous support levels turn into resistance on the way back up.
A few technical levels to watch moving on any rallies for the S&P are 1,265 (the June lows), and the 1,295-1,305 range as this area was home to bounces in February, April, and July. As for support, today’s low of 1,235 becomes the level to watch, with further support around 1,220 (1,220 coincides with previous highs from 2010). For a more in depth view of the technical picture, please view our video here.
We saw nice continuation out of SLV and GLD today in the metals space but we’d be remiss if we didn’t talk about the ridiculous penny stock alert in our chat room today. RCYT was alerted around the open and it went on to skyrocket over 4000%! That’s three zero’s, as in thousands, not hundreds. PVSP, LBSR, PCFG, & SRSR also were active in the penny market. Lastly, CBOU, which we highlighted as an earnings play this morning reported earnings of .13 per share vs a .09 estimate and shares rallied over 15% to a high of $16 for solid profits.
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