Major Supports Broken for S&P
500 Index (SPX) & Nasdaq 100 Index (NDX)
Says Market Timer Frank Kollar
May 21, 2010 (FinancialWire) (By Frank Kollar)
Both the S&P 500 Index (SPX) and its tracking ETF
the S&P Deposit Receipts (NYSE: SPY)
plus the Nasdaq 100 Index (NDX) and its tracking ETF the
Powershares QQQ (NASDAQ: QQQQ) have broken below key support
levels in trading on Thursday, May 20.
These key supports are the 61.8% retracement levels for
the entire February 5 through April 23 market advance.
The broken key support levels are 1882.82 for the NDX,
44.57 for the QQQQ, 1111.08 for the SPX and 111.28 for
the SPY.
The losses were on heavy volume and with the CBOE Volatility
Index (VIX) rallying to 45.79 by the close, we would have
to call it panic selling. Panic selling typically occurs
at bottoms, so the below support levels, if they are reached,
are indeed very critical for the days ahead.
With the above supports broken, the next support level
is at the February 5 intra-day lows for all these positions.
For the NDX this support is at 1712.89, for the QQQQ it
is at 42.12, for the SPX at 1044.50 and the SPY at 104.58.
These final support levels are critical for if they are
broken, there are only long term support levels left to
stop a free fall and all those long term support levels
are an additional 10% lower.
Should we reach them, we will already be in a bear market
with 20+% losses. That means we should see the markets
rebound soon if this is to be a normal correction. That
is why the support levels listed above are crucial to the
long term advance we have been enjoying since March of
2009. If we do break below them, we may be seeing the end
of the bull market.
The Fibtimer.com (http://www.fibtimer.com)
ETF Timing Strategy has positions in the S&P 500 SPDRs
and the Powershares QQQ .
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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