S&P 500 Levels & Analysis for Wednesday Feb 3, 2010
The SPY showed a little hesitation early Tuesday morning as it reclaimed the 5 day moving average, but then buyers decisively took control and pushed the market up just beyond the highs of the last week and past the 38.2% retracement of the break from the January highs to the recent low. Volume has diminished noticeably on this bounce of the last two days, but only price pays and it just gives us reason to view the bounce with suspicion, not reason to sell short. Short term, the market will need to hold the 5 DMA as support, but that average is now down at~109.10 and a more meaningful level may be near Friday’s high near 109.80 as the 5 DMA has a chance to catch up to prices if we see a time correction rather than a deeper price pullback. The message on different timeframes is mixed and that is a time which favors shorter term strategies.