S&P 500 Index Between Support & Resistance Says Market Timer Frank Kollar

May 22, 2009 (FinancialWire) (By Frank Kollar)

The S&P 500 Index (SPX) took a solid hit on Thursday, May 21 after advancing early in the week. Note that the S&P Deposit Receipts (NYSE: SPY) can be traded as a proxy for the SPX. Thursday’s decline places the SPX near its correction lows reached last week.

When those lows, at SPX 878.94, were reached it resulted in a huge rally on Monday, May 18. They constitute support for the market.

The highs, at SPX 930.17, reached two weeks ago resulted in the current correction and constitute strong resistance.

A close below SPX 878.94 would likely result in a continuation of the correction and lower lows. A close above SPX 930.17 would result in a breakout and likely to near-term higher highs.

For the SPY, support is at about $88.00 and resistance is at $93.00.

If we do move lower, initial support should be found around SPX 848 which is the 50-day moving average for this big cap index (for the SPY the 50-day moving is at about $85.00).

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

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