With about 40 minutes of trading, the S&P500 has pierced its 1230-33 resistance (which includes the 100-day moving average) though has come in a little from its morning high. Closing above the 100-day at 1232 will be an important win for the bulls. Lots of performance anxiety out there in the under invested crowd.
Here is a great quote from a money manager/trader we know well,
The systemic fear of going down with the ship keeps you on shore. You wake up one morning and find the ship has left dock. You jump in and try to swim to catch the ship and almost drown in the choppy waters. All while thinking you’re not sure if the ship will eventually hit the iceberg that kept you on the shore in the first place!
Miss the boat and if stays afloat for six months, in the words of Donald Trump, “you’re fired.”
Couldn’t capture the frustration and fear of missing the boat here any better. And the longs are worried that this may be a bull trap. That’s part of the reason why markets are so volatile. Nobody knows for certain what the future holds and that is what makes markets.
The levels to watch on the upside for the S&P are today’s intraday high of 1239.03; 1243, .618 fib retracement of August-October sell-off; and 1257.64, the break-even for 2011 and level where money will be forced in. The 1274.67, the 200-day, which will probably be slightly lower by year-end. Stay tuned.
(click here if chart is not observable)