The SPY started the session with a gap up and then it proceeded with a move toward the pivot high level at 199.84. On its way to the pivot high, it has encountered resistance from the declining trend line (1). Retreating from this resistance level, the SPY spent the entire morning on filling the opening gap. After it has filled the opening gap, it made another move toward the pivot high. In this attempt, it can’t even get back above the December 16, 2014 closing level at 197.91. Weakness slipped in after this failed attempt, and it sold off in the afternoon and into the close. The SPY ended the session at 194.79 with a loss of -2.64 or -1.34%. The next level for the SPY to hold is the level off the rising trendline of the ascending triangle (2). If it fails to hold above this trendline and unable to find support from the region between 191.61 and 190.73, then the October 15, 2014 levels at 186.27 and 181.92 will be in play. If it is able to hold above the rising trendline (2), the resistance levels it needs to penetrate are 197.91 and 199.84. If it can move above 199.84, then the March 11, 2015 close at 204.40 will be in play.
SPY - intraday
(click on the chart to enlarge)
The SP500 index closed at 1942.04 with a loss of -27.37 or -1.39%. In order for the ascending triangle price pattern to remain valid, it must hold the trendline support (1). The near term potential resistance is the 1993.48, provided it could move above the December 16, 2014 close at 1972.56. The potential key support level remains to be the October close at 1862.4.
SPX - intraday
The Nasdaq 100 bumped up against the 4349.93 resistance and retreated. It closed at 4253.45 with a loss of -50.08 or -1.16%. The 4349.92 remains to be the near term potential resistance and the December 16, 2014 close is the near term potential support. The October close at 3765.28 continues to be the potential major support level.
NDX
The Russell 2000 went above the recent pivot high for a short period before it’d retreated and ended the session in negative territory. It closed at 1148.23, a loss of -13.54 or -1.17%. The near term potential resistance level remains to be at 1175.51 and the potential support level continues to be at 1049.30, the October closing low.
RUT
Although the market gave up some of its recent gains and resumed to its relentless selloff mode today, the breadth did not deteriorate to an extreme level. The market will likely continue with its current choppiness and volatility until after next week’s FOMC meeting. In the meantime, one should continue to be cautious and be defensive. The current market environment still favors the short term traders and the day traders. Just a reminder, cash is a position.
