Monday, February 22, 2010
Last week
The surprise rate hike Thursday afternoon was good for an after hours trade down, but when the Friday's day session came, the market shook off the weakness, and finished the week with it's fourth straight up day. Option expiration was used as the excuse, but whatever the reason, the weakness was used as a buying opportunity.
As the chart above shows, we are now at a decision level for the S&P 500. Friday's trade smacked into the 62% Fibonacci retracement of the swing down from the high to low so far for 2010. If this retracement level does not hold as resistance, the next level up is the 78.6% Fib at 1128 (rounded up).
On the short term, we are overbought, and should watch for at least a mild pullback here, keeping in mind that the down move that started back in late January could be approaching its next leg. I'll be watching a gap up for a shorting op, then move to the first 30 and 60 minute brackets to watch for trend confirmation
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