Holding On

Today the SP500 and the DJIA dropped below their February 2010 low and bounced back above it. The market rallied during the last two hours of trading and the SP500 regained all its losses and closed with a small gain while the DJIA reduced its losses from nearly 300 points to less than 23 points.

As I have mentioned previously, the February 2010 low is a key support level the market must hold to avoid forming a new down trend. So far, the market is holding on to the February low. If this level is to be a support, then I will not be surprised to see a strong rally from this level before the market pulls back to retest it. The near term resistance for the SP500 will likely be the 200 SMA near the 1100.