S&P 500: What a Bounce!

After yesterdays disaster in the markets as the S&P 500 dropped 106 points, we recovered over half that amount on a bounce today of 58 points! Dangerous times to be in the market, but since we are lets look at we we are at specifically support and resistance.

First - We are definitely still bearish - S&P is well below the 200dma, made new 52 week low yesterday, and the 50dma is sloping down.

So look for Bear Calls folks!

Second - support and resistance - Support is easy - it is yesterdays low just above 1100; Resistance on the other hand is a little more gray. There is obvious strong resistance at 1300 and again at the 200dma of 1330. Now for weak resistance we are looking at 1200 as the continuation of a bear channel and 1250 as a double top from previous days this month. Both of these are weak and easily broken with the right amount of coaxing such as a spectacular deal from the Federal Government - HA HA HA! I crack myself up sometimes - spectacular deal and Federal Government in the same sentence…ROFL, but in any case it would be a perception of a deal that may break those resistance points, but do not expect the S&P or the rest of the market indices to break the 200dmas.

Just be happy that you are trading credit spreads and you can take advantage of these drops in the market and still make money, just stay above resistance and sell bear call spreads.

bear call spread, markets, resistance, S&P 500, support