Testing the S&P500 support, is it going to hold?

March 6th, 2012
in Gary's blogging, midday post

12:10     What is important here and now is that the 500 has slowed its morning fall and is currently consolidation at the ~1344 support level on low volume. Going below this "zone" at 1344 represents a real bear movement, however, staying above and then continuing to rise supports the bulls who see 1400 and beyond.

The continued problem of low volume hasn't gone away by any means. It means lack of participation and market conviction. Today's first 3 hour volume has been the heaviest in some time, but still anemic in overall YoY comparisons. Currently the red volume outweighs the green volume by 2 to 1    and does not mean tomorrow we will see a continuation of today's action. In fact I am surprised DaBoyz allowed the market to fall as far as it has as their profits are made in controlled smaller swings. Maybe the public is starting to wake up and smell the coffee commodities falling. (Chart here)

Follow up:

Obviously some profit taking has taken place this morning, but by no means would I call this drop a waterfall. Maybe an open water faucet, but until we see some relevant volume to coincide with movements, then these market rises and the current drop is to be viewed with caution.

More problems are on the horizon as ADVFN points out here.


@advfn: "With just a couple days to go before the Greek debt-swap deadline, investors were in a cautious mood as the Footsie slipped lower in early trading on Tuesday.

Europe is awaiting a final decision this week on the Greek debt restructuring. Private investors have a March 8th deadline to decide if they will accept a debt exchange in which they will be required to take a 53.5% haircut in an agreement that would save Athens about €106bn (£88bn).

However, the Institute of International Finance (IIF) - the group representing Greece's private creditors - has said that a disorderly Greek default would leave Italy and Spain in need of additional aid, taking the total amount of liabilities over the one trillion euro mark, Reuters reported this morning."



While catching up on relevant news this morning I read where I could be shut down by a cell phone jammer. I depend on the cell phone "Hot Spot" to get my publications out on a timely basis.  (Read more here)

Finally The 500 has started "testing" the 1344 zone, but on higher than normal volume that is prevalent for this time of day. I suspect the 500 will rise before the end of the day as DaBoyz play with themselves and would be surprised if it did fall further. On Friday, I suspect we will see fireworks as the Greek default question is answered. The Non Farms Payroll also comes out on Friday so having the markets move around in low volume, non-defining zones is not exactly a surprise to me.

In the past the markets have moved up after the European markets close, but that doesn't seem to be in the cards today.

@cnn: "European markets finished sharply lower today with shares in France leading the region. The CAC 40 is down 2.91% while Germany's DAX is off 2.87% and London's FTSE 100 is lower by 1.85%."


The real action is over probably until Friday, but we will keep you up to date with the latest anyway.

Written by Gary




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