Approaching Support
27th September 2009
The stock market is once again approaching levels of support, this time at 9600 for the DJIA, 1040 for the SP 500, and 1675 for the Nasdaq. Since March, every time stocks have come down to their 20 day MA, they have provided bulls an opportunity to get into the market at better price levels. While a drop below these levels would signal a market correction rather than a pull back, we would have to see a close below 9200 in the DJIA, 1000 in the SP 500, and 1600 in the Nasdaq to signal an end to the market’s 6 month bull run.
We should know early this week if the first of these levels is likely to provide some support. Traders can continue to hold their bearish option positions until one of these levels holds the market up. If and when this happens both traders and investors can open or add to their long positions.
JD
