S&P 500 Market Analysis 10/28/09

Pre-market, the SPY is trading just below 106.00 as the short term path of least resistance continues lower. The market closing in on the rising 50 day MA which is current located at ~105.11 Yesterday’s weakness brought the SPY down to the 50% retracement (106.16) of the most recent leg higher and it is interesting that the 61.8% retracement is found at 105.17, which adds further significance to the location of the 50 DMA and prior short term support in that area. It is still possible that the market will overshoot the 105 level and continue down towards the intermediate term uptrend line which is found ~104.20