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We had “Day 4 of Bears Gone Wild” yesterday. Ironically, the technicals are still not oversold, which tells you what kind of a run-up the bulls had (+102 points on the S&P 500).

The last time the S&P 500 had a 4 day drop, it fell below the bottom of the Bollinger Bands on the second day. The S&P has a long way to go before it even sniffs the bottom of the BB’s, at 1615. Before it even comes close to that, the S&P 500 will have to pass through 4 good support levels (as shown in bold under the “downside” header below) and 12 minor support levels. It isn’t impossible, but probably not happening in one day either. We would need some horrible news to cause a huge market sell-off.

The S&P 500 levels to watch today:

UPSIDE: 1700 (September 18th’s low), 1704-1705 (2 data points), 1707-1711 (3 data points and August’s high), 1720 (September 19th’s low), 1725 (September 20th’s high), 1729 (2 data points and the all-time high), and 1736 (top of the Bollinger Bands).
LAST CLOSE: 1697, inside the 1697-1698 (2 data points and July’s high) range.
DOWNSIDE: 1694 (September 24th’s low), 1691 (September 16th’s low), 1687-1689 (3 data points and May’s high), 1684 (September 10th’s high), 1681-1682 (2 data points), 1679 (50 day moving average), 1678 (September 11th’s low), 1675 (September 10th’s low and the 20 day moving average), 1672 (September 9th’s high), 1664 (September 6th’s high), 1659 (September 5th’s high), 1651-1656 (4 data points and June’s high), 1640 (September 6th’s low), 1637 (September 4th’s low), 1633 (September 3rd’s low), 1627 (August’s low), 1615 (bottom of the Bollinger Bands), 1604 (July’s low), 1597 (April’s high), and 1585 (200 day moving average).


Posted September 25, 2013 by edmcgon in Daytrading, Investing, Market Analysis

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