Key Price Levels To Be Aware Of
Today’s sell-off started
to give a hint that some lower prices were about to carved out.Â
However, right on cue, the market managed to head right back towards the highs
of the day in the last hour. So, while the S&P’s still closed down, much lost
ground was gained by day’s end. Price action remained muted. Yes, there was an
orderly decline throughout the morning, but little in the way of volatility
which allowed for traditional HVT entries on
the short side. Once again, gold and mining stocks were active, albeit to the
downside. The gold sector has had a great run, and up until now there have no
meaningful corrections, might this be the beginning?
First, let’s get back to the S&P’s, today’s gap
lower on the heels of Asian and European sell-offs due to increased terrorism
threats has left a couple of key price levels we need to be aware of.
If you take a quick look at a longer time frame
chart, like a 60, 120 or 240-minute, you would have to say that this move lower
from Friday’s highs looks impulsive. One thing that I learned about this market
(since October 2002) is to not get too cute trying to pick points for
major/intermediate reversals. However, looking at the marketplace as a whole,
you need to factor this possibility in, time will tell. My guess is that if the
market comes under pressure again, 1032 is my short-term target/support level.
Meanwhile, gold (metal) got roughed up pretty
good as it tried to take out the $400 level, it traded back down to $386
intra-day only to close off those lows. Again, this is bigger picture analysis,
nevertheless, myself as well as many of my readers are long gold as a
longer-term trade idea/investment. I took some money off the table a few weeks
ago, put it back to work late last week, and will monitor what to do next. The
overall core position will remain. Luckily, in the “not much analysis required”
to make this trade department, gold mining stocks continue to move very well
intra-day. My focus will remain here as well as the levels described above in
the S&P’s
Yesterday I mentioned that I was going long the
Dollar vs the Yen (USD/JPY), while that
trade is presently underwater by about 50 pips, the EUR
long from last week is making another assault at 1.1850-1.1900 level. It has
made several runs at it in the last few weeks and appears to be at it again. I
will maintain a stop-loss at break-even (1.1729) and will be looking for a move
towards 1.2020 if the previous highs can be taken out decisively.
Lastly, as you see by the chart above, I am
looking to get short EUR/GBP on a break
below .6927. This trade makes sense technically and is supported by a few macro
factors:
1. Negative interest rate differential
2. Stronger growth in Britain
3. More rate increases in Britain on the wayÂ
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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As always, feel free to send me your comments and
questions.