S&P 500 Morning Analysis 8/17/09

Pre-market, the SPY has traded as low as 9854 and is currently at ~9910. The support we have been observing at 9940 has been broken and we will now look for that level to act as resistance if the market is going to continue lower to the next level of potential support at 9840. The biggest level of potential support for this market is now down near the prior resistance at 96 which is the approx 38.2% retracement of the rally from the July low to the Aug high and the VWAP from the low to Friday’s high is found near 96.75 The market has been volatile lately and we now have a lower low to accompany the lower high, the intermediate term trend is lower.