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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

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- 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

This week’s major stock market drop was SHOCKING to many. Even more AMAZING was that Forex Mastery creator Gary Albrecht called the DOW as a SHORT pre-market on Thursday, based on his propriety M3 Forex Navigator software.

Just before it CRATERED and lost over 1000 points in ONE DAY!

… And he did it LIVE in a room full of 400+ traders.

You can see for yourself and watch the entire video here:

==> Visit Forex Mastery 2.0 Website

Gary actually called the crumbling of the DOW months ago by using his system, and then he did it again this week just before it actually happened on Thursday.

In fact His exact words were:

“The DOW is setting up for a MASSIVE retracement”

And later that day we saw one of the biggest drops in US History on the Dow Jones Industrial Average.

Fortunes were made by some no doubt…

But only those who knew ahead of time, and who were short at the open.

Watch the video below to see it unfold:

==> Visit Forex Mastery 2.0 Website

The video is actually a two hour preview of the Forex Mastery system and the M3 Forex Navigator system, which he gave during a Non-Farm Payroll class at OU Forex Trader.

True, Forex Mastery is primarily a Forex Trading system…

But he was showcasing one of the NEW features of the system, a Dow Index he’s created using his proprietary indicators.

So now even STOCK and OPTION traders can benefit as well.

Gary’s call on the DOW was uncanny (maybe even a little SCARY).

If you want to skip to the part specifically, just fast forward until you see the DOW chart less than 1/3 of the way into it.

Just prior to that, while looking at the NEW M3 Market Scanner he mentions the prophetic words above…

I recommend you listen to the entire presentation, because he shows how his entire system works, from start to finish.

(The entire thing is a stroke of financial brilliance…)

Check out the video here:

==> Visit Forex Mastery 2.0 Website

There’s a new sheriff in town when it comes to Forex Trading.

His name is Gary Albrecht, and the Forex Mastery system. But you can’t get your hands on it just yet. Watch the video to find out.

This video will be pulled offline by the end of the weekend, so take a look now while it is still online.

- About the Author: Rob Trader – Forex Expert http://tradingtoollist.co.cc/ Article Source