The SPX breached a much watched technical level today… the 200 Day EMA. It also closed below it for the first time since late 2014.
The weekly chart shows that the bottom of the Value Range is in jeopardy.
In terms of price levels to watch, I would keep an eye on 2,040 (a more recent support level), 2,000 (another psychologically important level) and the 1,965 to 1,980 range. Even if price manages to breach each of these levels, be on the lookout for a sharp bounce not unlike the sharp pullback and launch in 2014.
Alternatively, if you consider the late June high around 2,125 a lower high and the price action here a lower low after having breached the 2,070-2,075 support level, you should wait for a retracement of this most recent down move before laying out shorts… to the extent you do that sort of thing…
Here are a few other reasons for bulls to sweat…
Dow Jones Transports
And a couple of reasons for bulls to be hopeful…
At any rate, as long as you keep your wits about you and your risk contained, you can enjoy these volatile days. It’s where the best opportunity often lay for short term traders.
P.S. Trading on the NYSE was suspended for better than 3 hours today… and the markets never skipped a beat. The floor has been shedding bodies for years… I suspect that might accelerate going forward.
9 July 2015 Update: Apparently others are thinking similar…