Tuesday, February 9, 2016

SPX S&P 500 5-Minute Chart Support/Resistance Levels

The blue  lines highlight the strongest S/R levels at 1897, 1884, 1878, 1874, 1872, 1848, 1841 and 1808. Note the air pocket between 1872 and 1848 and between 1841 and 1808. The gap down yesterday tests 1848, which fails, so 1841 is quickly tested and price jumps. Thus, price moves higher to back kiss the 1848 for a bounce or die decision, and fails. Price then drops for another test of 1841 support, and fails. The SPX drops to 1834 as the European indexes close at 11:30 AM EST.

Then a recovery occurs after the European close, which is anticipated by traders since this typically occurs each day, but instead of recovering higher, price moves up to test the 1848 R again, and fails. Thus, price collapsed back down to test 1841 S, and that fails, so the bottom falls out. At 2:30 PM, the low prints at 1828.46 (pay attention to this number going forward) in conjunction with the TICK machine printing uber low -1200 and -1400 numbers and the VIX peaking for the day at  27.72. The uber negativity is off the charts so a quick relief rally is needed, which occurs. Price comes up to back kiss 1841 R and pushes higher. The SPX tests the 1848 resistance and pushes up through placing the 1872 resistance on the table and 1848 becomes support to end the day.

S&P futures are down -15 as this is typed about 90 minutes before the Tuesday, 2/9/16, opening bell. The drama around the key and very strong S/R levels at 1848 and 1841 will continue. Use these levels to gauge who is winning and losing. Markets remain very erratic and unpredictable. It is typically best to watch and do less trading in this type of environment.

Typically, when the VIX is above this 25-26 area and higher, if you buy stocks, you are typically correct as the weeks play out. The elevated VIX reflects fear in the markets and buying fear typically works out in your favor. Put/calls are elevated. Reference the previous SPX Support/Resistance missive for S/R levels between the major levels shown above by the blue lines. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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