Last week was exciting as investments rocketed higher or tank… We saw Gold and the US Dollar pop while oil and equities dropped sharply with heavy volume.

Just to recap, Wednesday the market went into free-fall mode sending traders and investors running for the door. This was obvious from looking at the large percent drop coupled with heavy selling. That day the NYSE showed panic selling with 37 shares sold for every 1 share purchased meaning pure panic. In my Wednesday night report “How to Take Advantage of Panic Selling for SP500 and Gold ” I explained how to read these extreme market conditions and what to expect the following sessions.

Currently the price of gold, oil, spx are trading somewhat at the opposite extremes seen last week. Below are a few charts explaining the situations:

GLD – Gold ETF Trading Signals

This 60 minute chart shows gold getting hit hard on Wednesday morning. Investors and traders around the globe were closing out positions and moving to cash. This high volume dumping of positions pulled virtually all investments lower and was the first tip-off that the market was in panic mode.

One the dust settled and investor’s regrouped we saw money surge back into gold creating a nice pop the following day. Problem I see is that gold is now trading at a key resistance level when reviewing the daily chart. And if you take a look at the 60 minute chart below you can see the price of gold sold down in the morning on August 13th and drifted up into the close on Friday forming a bearish wedge. Also there was some very strong selling just before the market closed which is also a concern.

USO – Oil Traded Fund

Both times oil has fallen we have seen the price pierce key support levels where the bulls would have the majority of their stops placed. The intraday pierce causes the stops to be triggered washing the market of long positions while the smart money loads up accumulating everyone’s sell orders . This is something which happens with virtually every type of investment and the main reason traders get shaken out just before the market goes in their direction. Anyways, running of the stops is something I will cover in a future report.

Looking at the chart below you can see oil trading at trendline support. Each time the key support levels (blue arrows) have been pierced the market has rocketed higher. Just from looking at the chart from August 9th forward you can see that this move down is overextended and visually looks ready for a pause or bounce in the coming days.

*Trading Tidbit - When trading trendlines it is important to try and play the third test. Reason being is that the first two pullbacks create the trendline and the third test is when active traders generally jump on board causing a sizable bounce. Each test of a trendline it becomes weaker and the probability of a breakdown is more likely.*

SPY – SP500 ETF Trading Fund

The SP500 chart shows last week’s breakdown on the 5th test of the trendline. The market is oversold here and ready for a bounce which I hope we get this week. My concern is that the downward momentum is to strong and a bounce will be negated.

US Dollar Index

US dollar put in a huge bounce last week after testing is 61.8% Fib retracement level from the 2009 December low. The strong bounce has pushed the dollar up to a key resistance level which happens to be 38.2% Fib retracement level from both the December up trend and the recent sell off. I figure this will hold the dollar down for a few days easing the pressure on oil and equities.

Weekend Gold, Oil, SPX and Dollar Trading Conclusion:

In short, I feel there will be a relief bounce in oil and equities while the dollar and gold will have some profit taking and trade sideways or down at the beginning of the week. After that it looks as though stocks and oil will head lower while the dollar and gold rally.

If you would like to receive my Trading Analysis and Signals Complete with Entry, Targets and Protective Stops please visit my website at: www.TheGoldAndOilGuy.com

Chris Vermeulen

- About the Author: Chris Vermeulen is Founder of the popular trading site http://www.thegoldandoilguy.com. There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets. Subscribers to his service depend on Chris’ uniquely consistent investment opportunities that carry exceptionally low risk and high return. Reach Chris at: Chris[at]theGoildAndOilGuy[dot]com Article Source

Visit our Tradermongers Blog for charts!

S&P 500

Today is the 7th trading day of August and the market has held up well however today is the FOMC Announcement so anything can go. After the Nonfarm payrolls fell by 131k last month, traders and investors are looking for the Fed will need to ease policy to stimulate the economy. Some of these measures include the Fed buying Treasuries and postponing any sales of its balance sheet assets. However the concern over deflationary pressures is a concern for the Fed.

According to the Stock Trader’s Almanac, the S&P was up only twice in the last 13 years and the first nine trading days are the weakest of the month. Historically it is the weakest month of all seasons as many institutions, investors, and traders are away during the month of August on vacations before their children go back to school in September.

Beware of rallies as the middle of August seems to be stronger than the beginning and the end according to the Stock Trader’s Almanac. Traders seem to sell before the weekend and follow the direction of the foreign markets after they trade on Monday. China brought the Asia markets lower pushing the dollar higher against all major currencies.

Yesterday the market broke through into the January 2010 resistance level. Last week the markets had a hard time breaking through the 1125 resistance level which begins the January 2010 resistance levels. Whether the markets can hold on to this level is another story only to be determined after the FOMC announcement. Not enough volume is expected during the summer months to push the markets above this level especially during the month of August. However with global economy expecting slowdown foreign economies see safety within the US markets.

On the daily chart of the S&P 500 we were trading between the cushion area of 144 and 200 day moving averages as traders and investors are cautious looking ahead especially with the upcoming mid-term elections, uncertainty with European debt, and the current Gulf Oil Spill. Now we have slowly broke out of this area after the European banks passed the stress tests. However as we have stated before the markets will remain trading below the January 2010 resistance levels which begin at 1125.

The Market Volatility Index (VIX) has been active due to the seasonal selling trend of the ‘Sell in May’ philosophy however seems to stabilizing after the Fourth of July weekend and the anticipation of second quarter 2010 earnings season. Currently the VIX trading below the 144 and 200 day moving averages indicating more risky approach towards investments and assets.

The Chicago Board Options Exchange (CBOE) Market Volatility Index measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar when the index is trading above 30.

Summary of Major S&P Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

Technical Levels 15 Minute Chart

1120: 144 Day Fibonacci Moving Average on 5 Minute Chart

1118: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1091: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

FOMC Announcement / 14.15 EST

* Subscribe to our News Feed to get Updates, Trading Strategies Daily, and Sector Stock Lists.

- Technical and pivot levels for the S&P and other indices

- Alerts for 52 highs and lows as well as their respective sister stocks to watch

- Highlights on the economic calendar and trading strategies off those numbers

- Analysis of various sectors of the markets as well as sister stocks to watch

- Much more

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers Live News Feed Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

A weak July consumer confidence fell to a 5-month low offset the latest round of strong corporate earnings. On Wednesday June durable goods orders as well as the weekly mortgage applications and petroleum reports. The Beige Book is expected today which report economic conditions used for the FOMC meetings in 2 weeks. Expect the market to move after the 2pm Eastern Standard Time announcement.

On the S&P 500 on the 60-day chart shows we have been rallying since the beginning of July especially after options expiration last Friday. Expect the market to hit the January 2010 resistance level as we approach the slowest month of the year – August. The volume will not be enough in August to break through the January resistance levels.

TO BE CONTINUED WITH CHARTS AND VIDEOS HERE!

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers Live News Feed Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The market previously rallied up for the past week in anticipation for Friday’s quadruple witching day. Sideways trading occurred as expiration of contracts for all stock index futures, stock index options, stock options, and single stock futures took place.

This Wednesday on June 23rd we have the FOMC meeting, which will give us a direction on where interest rates will be heading. With jobless claims still high and the economy still recovering expect the interest rates to be kept the same however watch for any indication in the wording once the FOMC announcement is made.

Currently, ‘shadow inflation’ has been on the rise as airlines are adding additional subcharges, telecommunications are increasing pricing, and banks are adding additional fees for maintaining accounts. This type of inflation will erode potential recovery and consumer savings.

Looking at the technical level on the 5 minute chart for the S&P 500 Index, we are currently below the January 2010 resistance level which starts at the 1125 level. Breaking this level could mean a huge push upwards as investors and traders return into the markets. However summer has already started so be cautious of low volume trading days ahead and expect days with quick rallies followed quick falls.

On the daily chart of the S&P 500, we are between the 144 and 200 day moving averages of 1110 and 1087. Do not expect any major movements unless we break out of this trading range.

-         If we break above 1110 then expect the January 2010 resistance levels starting a 1125 to hold back the market during these low volume summer months.

-         If we break below 1087 then be wary of picking bottoms in the market as we may be expect to go even lower due to the slow down in manufacturing, increasing jobless claims, the European debt crisis, and the fears of another ‘flash crash’

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

The Market Volatility Index is currently below 30, which usually means that traders and investors are switching from cash to riskier assets such as equities and other financial instruments. If the volatility breaks through the 25 level then the markets show an influx of equity purchases. The 25 level is a major level of support for CBOE Market Volatility Index as it is the convergence of the 144 and 200 day moving averages. This index must break down below 25 or bounce above 30 for the markets to show a consistent momentum and direction.

Summary of Major Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1115: 144 Day Fibonacci Moving Average on 5 Minute Chart

1114: 200 Day Fibonacci Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1110: 144 Day Fibonacci Moving Average on Daily Chart

1087: 200 Day Fibonacci Moving Average on Daily Chart

Monday Economic Calendar

No Economic Numbers Scheduled – Watch European and Asian Markets

3 – Month Bill Auction / 11.30 AM

6 – Month Bill Auction / 11.30 AM

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

Fears of the European debt crisis continues to mount however many traders and investors believe that the US will recover at a much faster pace. Ben Bernanke will be testifying tomorrow before the Committee on the Budget, US House of Representatives however today he mentioned to be ‘cautious on the US recovery.’ The Beige Book will be released tomorrow however many believe that the FOMC will keep interest rates low for a while. The dollar lost ground to the euro due to purchases of equities that rallied the market.

We rallied above yesterday’s 144 day moving average on the 5 minute chart at 1058 so we expect to finish above this level. The S&P 500 took a breather today after two days of declines and rallied near the 200 day moving average of 1062 on the 5 minute. Expect the markets to be in a narrow trading range within these low volume trading months.

We expected the markets will be in a tight trading range between 1075 and 1100 however the lower the indices trend the trading range decreases has well. We now expect to be within a trading range between 1025 and 1075

On Thursday the 1071 level and 1075 will provide adequate resistance levels while the 1050 will provide a natural support level for the S&P 500. The 1071 was Tuesday’s previous high and the 1075 is the natural resistance level.

On Tuesday we had a retracement to the 1050 area which we reached in early February. This second attempt could break this area due to the low volume trading during the summer months as well as the issues facing Europe sovereign debt and the BP oil crisis. However we broke through the 1050 level only to rally at the end of the day to 1062.

We are trading below the 200 day moving average on the daily chart (1085) so expect any positive news to be a temporary rally as the volume dries up as me move along towards August – the slowest trading month.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The volatility index is above 30.00 as of so traders and investors may maintain their short positions and retreat to safer assets.

However due to the low volume in the recent rally and liquidation of mutual fund investors due to frightening instances such as the ‘flash crash,’ European debt crisis and BP Oil Spill expect volatility will return and traders will prey and make money on both ends. Traders will buy when investors are fearful and sell when they are euphoric and confident.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1111: 144 Day Fibonacci Moving Average on Daily Chart

1100: Natural Resistance Level

1090: Important Pivot Level

1085: 200 Day Fibonacci Moving Average on Daily Chart

1075: Natural Resistance Level

1063: 200 Day Fibonacci Moving Average on 5 Minute Chart

1058: 144 Day Fibonacci Moving Average on 5 Minute Chart

1050: Natural Support Level

Wednesday Economic Calendar

Mortgage Applications / 7.00 EST

Wholesale Trade / 10.00 EST

Petroleum Report / 10.30 EST

Beige Book / 2.00 EST

Ben Bernanke Speaking / 10.00 EST and 16.00 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

After Memorial Day weekend beginning the half way point of the year and start of the slow summer season vacations all the market indexes are trading near levels seen on January 2010. Even the summer movies have a hard time getting off of ground such as the recent Memorial Day weekend movies: Prince of Persia and Sex in the City 2.

2010 has not been a great year as revelations are revealed concerning off shore drilling, European countries debt exceeding their GDPs, and the ‘flash crash’ fallout on May 6th. These uncertainties are adding volatility to the markets and traders and investors are seeking safety within Treasuries, gold, and the dollar. The market will continue to go lower as the volume of trades continues lower as we enter the slow summer months and low risk assets become more appealing.

On Friday the S&P 500 index ended the last trading day in May at 1089. We have mentioned that the 1090 resistance level is a major level to break. It was broken on Thursday due to a short covering rally and fell back.

The S&P 500 index is currently trading below the January 2010 resistance level and ended the day on Friday on the 200 day moving average on the daily chart of 1089.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the dollar.

As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The index is also slightly above 30 so unless it is below this level do not expect a confirmed rally or upside within the equities market.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1115: 144 Day Fibonacci Moving Average on Daily Chart

1100: Natural Resistance Level

1091: 144 Day Fibonacci Moving Average on 5 Minute Chart

1090: Strong Resistance Level

1089: 200 Day Fibonacci Moving Average on Daily Chart

1088: 200 Day Fibonacci Moving Average on 5 Minute Chart

1175: Natural Support Level

Wednesday Economic Calendar

Motor Vehicle Sales

ISM Mfg Index / 9.00 EST

Construction Spending / 10.00 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The European markets are plaguing the markets as their debts will hurt the global financial sectors. On the US front the Federal Reserve banks want to raise the discount rate, which is a sign of confidence of recovery within the economy. However jobless claims are still high so any chance of currently raising interest rates are nil.

The S&P 500 index finished as it did yesterday around the natural support level of 1175. Investors and traders maybe covering their shorts the ‘Volcker Rule’ is slowly becoming a reality which limits high-risk trading near July 4th.

The index met resistance due to Monday’s previous high as well as the convergence of the 144 and 200 day moving averages on the 5 minute chart. The S&P 500 index should be trading below the 1190 Monday’s resistance. An upward breakout could possible push the towards the 1110 area.

Looking at the daily chart of the S&P 500, the index is currently trading below the January 2010 resistance level as well as the 144 and 200 day moving averages. Yesterday we mentioned that the S&P 500 will be range bound between 1175 and 1110 as we head towards the slow summer months. The index traded below this range however rallied and finished near the natural resistance level of 1175.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. Increasing volatility implies pessimism within the market and stocks sell off as traders seek protection for their assets.

A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the dollar. As long as we stay above this level expect pessimism as we approach the slow summer months. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. The index is also slightly above 30 so unless it is below this level do not expect a confirmed rally or upside within the equities market.

As long as we are below the 1075 level on the S&P 500 and the market volatility is above 30 expect choppy trading with no confirmed rallies. We still expect the market to be range bound between 1075 and 1100.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1116: 144 Day Fibonacci Moving Average on Daily Chart

1110: Natural Resistance Level

1190: Monday’s Previous High

1086: 144 Day Fibonacci Moving Average on 5 Minute Chart

1085: 200 Day Fibonacci Moving Average on Daily Chart

1175: Natural Support Level

1069: 200 Day Fibonacci Moving Average on 5 Minute Chart

Wednesday Economic Calendar

Mortgage Applications / 7.00 EST

Durable Goods Orders / 8.30 EST

New Home Sales / 10.00 EST

Petroleum Report / 10.30 est

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

Fear overseas is playing apart during today’s trading. Greece debt and the bailout offered are presenting questionable actions on whether the play will help the euro. China’s real estate bubble and the falling price of copper are indicating fears of deflation rising throughout the global economy.

The S&P 500 index finished just below the natural support level of 1175. The index met resistance due to Monday’s previous high as well as the convergence of the 144 and 200 day moving averages on the 5 minute chart. The S&P 500 index should be trading below the 1190 Monday’s resistance. An upward breakout could possible push the towards the 1110 area.

Looking at the daily chart of the S&P 500 index, its still trading below January 2010 resistance level as well as the 144 day moving average of 1117. Expect the market to be range bound between 1175 and 1110 as we head towards the slow summer months.

The Chicago Board Options Exchange (CBOE) Market Volatility index (VIX) measures options activity within the market and is widely used tracking the S&P 500. Increasing volatility implies pessimism within the market and stocks sell off as traders seek protection for their assets.

A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. Traders and investors are retreating from the markets and finding safety and protection within the dollar. As long as we stay above this level expect pessimism as we approach the slow summer months.

Summary of Pivot and Technical Levels

1219: S&P 500 52 Week High

1117: 144 Day Fibonacci Moving Average on Daily Chart

1110: Natural Resistance Level

1190: Monday’s Previous High

1086: 144 Day Fibonacci Moving Average on 5 Minute Chart

1084: 200 Day Fibonacci Moving Average on 5 Minute Chart

1085: 200 Day Fibonacci Moving Average on Daily Chart

1175: Natural Support Level

Tuesday Economic Calendar

Consumer Confidence / 10.00 EST

Ben Bernanke Speaks / 20.30 EST

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

Understanding the direction of the market as well as the economic activity will lead you to profitable trades. Keep up with our live news feed and the trend with Tradermongers.com!

S&P 500 Pivots

On Thursday the US equity indexes continued it’s May sell off philosophy. All the major indexes were down for the day amplified by the European debt crisis, the oil-spill in the Gulf, and the recent 1000 point crash in the Dow Industrials. After a three day sell off there could be a possible rally due to options expirations tomorrow as well as traders and investors getting out of their short positions prior to the weekend.

The S&P 500 index on the 5 minute chart fell for the third straight session trading below the 144 and 200 day moving averages. The 200 day moving average converge with Wednesday’s previous low at 1101 so expect resistance between 1100 and 1101 going into Friday’s trading day. Commodities are weaker due to the events listed above as well as a possible slowdown in China will drain global growth. Today jobless claims were released and a jump from 25k to 471k didn’t encourage the US equity markets.

Currently the index is below the 200 day moving average on the daily chart. We have told our readers before the S&P 500 is currently undergoing a correction. On the daily chart of the index is currently trading below the January 2010 resistance level of 1121. The first resistance level is 1100 and 1101. Expect the S&P 500 to find resistance breaking the second resistance level between 1117 and 1120 area as it is below the January 2010 pivot level of 1121. We had a three day sell off in equities as we approach Friday’s trading day. Tomorrow expect a mini rally due to options expiration.

The market volatility index (VIX) measures option activity within the market and is widely used tracking the S&P 500. Increasing volatility implies pessimism within the market and stocks sell off as traders and investors are seeking protection for their assets instead of risks.

A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the dollar. Currently the VIX is above the 144 and 200 day moving averages on the daily chart. As long as we stay above this level expect pessimism as we approach the slow summer months.

Summary of Pivot and Technical Levels:

1219: S&P 500 52 Week High

1101: 200 day Fibonacci moving average on 5 minute chart

1100: Natural Resistance Level

1096: 144 day Fibonacci moving average on 5 minute chart

1127 – 1141: Major resistance level for the S&P for January 2010

1117: 144 day Fibonacci moving average on daily chart

1085: 200 day Fibonacci moving average on daily chart

Friday Economic Calendar:

No Economic Numbers Scheduled

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice, and nothing in this material should be construed as such. There is a risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all advice and all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

- About the Author: Shamim Ziyaaudhin is one of the editors of TraderMongers.com a one stop trading news feed source for worldwide traders and investors. Their philosophy is to establish the standard for providing market news feed that is comprehensive, accurate, and concise. Providing technical and fundamental trading setups, economic numbers, and calendar events throughout the trading day. Shamim has a Masters in Business Administration from Fairleigh Dickinson University and holds a degree in Psychology from Rutgers University. Click here to subscribe to Tradermongers E- News Article Source

May 16, 2010Last week was amazing for both gold and index traders as gold surged higher and the SP500 tested a key resistance then fell 4% in our favor. The past couple weeks with the mini market crash and Euro issues making the market extra volatile both gold and the broad market (SP500) index has been wild.

The added volatility makes trading more difficult because price patterns become less predictable and price movements are much larger increasing risk for traders.

Below are the charts & videos of what to look for in the coming days…

GLD – Gold ETF TradingGold continues to trend higher at an accelerated rate. Friday we saw gold pullback and test a key support level then bounced to close in the middle of the days trading range. As you can see the trend line support has become very steep and once the trend line support is broken I figure there will be a sharp drop to digest the recent rally.

SLV – Silver ETF TradingSilver popped and tested a key resistance level from a previous high as expected. It also tested the top of its trend channel providing even more resistance. This week will be interesting as we wait to see if precious metals have a small pullback or continue to rally.

SPY – SP500 Index ETF Trading ChartThis chart clearly shows what I think is about to unfold by looking at the past market drop. Because of the mini market crash triggering everyone’s stops already I figure we have made the low and the dip we are seeing now will drift down a few more percentage points then bottom out.

ES M0 – SP500 Mini Futures Trading Setup – Pre-DropBelow is a chart of the SP500 which we shorted or bought the SDS bear etf trading fund last week looking to profit from a falling stock market. As you can see from the chart we saw the es mini contract drift into a key pivot point on light volume. What this means is that a large group of sellers will be waiting at that price, and because volume is light we know there are not many buyers at this price level. Simple supply/demand comes into play with more sellers causing the price to stop rising and eventually force the price lower which is what we were anticipating.

The green arrows show key support levels on the 60 minute chart where 1/3 of a position should be taken of the table to lock in gains which also reduces overall risk on the trade. Once we cash in the first 1/3 of the position we move our protective stop the breakeven which is the entry point for the remaining portion of our position. This turns the trading into a winner no matter what happens allowing us to enjoy the ride…

ES M0 – SP500 Mini Futures Trading Setup – Current PriceHere is the same chart 24 hours later showing both of our profit targets triggered pocketing 2/3rds of our position for a very nice gain. Depending on the type of trading vehicle you traded there was potential to make up to 150% return in less than 24 hours.

We currently hold 1/3 of the position left with a loose stop allowing the trade to mature incase the down trend continues for several days or weeks. If not and the price rallies then our stop will get triggered for small profit on the balance of the position. Either way we win.

Pre & Post Market Correction Video: http://www.thegoldandoilguy.com/articles/sp500-market-correction-trading-videos/

Stock Market ETF and Futures Trading Conclusion:In short, the market is trading on increased volatility making it difficult to find low risk setups. At the moment we are long gold and short the SP500 with both position deep in the money. All we can do now is manage our positions to make sure we maximize our profits.

If you would like to Get My Trading Signals be sure to check out my services at: www.TheTechnicalTraders.com

Chris Vermeulen

- About the Author: Chris Vermeulen is Founder of the popular trading site http://www.thegoldandoilguy.com. There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets. Subscribers to his service depend on Chris’ uniquely consistent investment opportunities that carry exceptionally low risk and high return. Reach Chris at: Chris[at]theGoildAndOilGuy[dot]com Article Source