I was out-of-town on Friday for a long weekend with friends, but I tried to stay up on what was happening with the market when I had the chance to check my phone. I won’t dive into the payroll report or what it means for the Fed, plenty of others have already tackled the topic. What I do want to discuss is the interesting market action around the important levels we’ve been watching all in matter of a single day.
In my post last week, “The Critical Levels For Equity Bulls” I discussed the prices I was watching for the S&P 500 ($SPX) and what bullish traders would need to conquer for us to keep the train moving up the hill. Since then the 20-exponential moving average has still been the battle line as we have seen breaks above intraday but yet to get a close above the 20-EMA since mid-August.
Let’s zoom in on just a single candle on the chart below, specifically Friday’s price action. In the morning we saw equities head lower and find support at 1640.62, just a hair under the 100-day moving average. We then spent the rest of the day advancing up to 1664.83 as the S&P found resistance at its 50-day moving average around 2 pm. Going into the close I was watching to see if we could get a close above the 20-EMA, but there just wasn’t enough strength to get it done as we finished just a few ticks under.
In the span of a single day all three key moving averages for the S&P were tested – a great example of how we can incorporate daily support and resistance into intraday trading.
Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.
