Monday, June 21, 2010

S&P 500 Still Testing 200 Day Average (Chart)


SPX closed at 1113.20 today, just above the 200 day simple moving average of 1110.77. This was after gapping up at the opening to an intraday high of 1131.23, presumably on the news that China was the yuan currency peg. The Yuan Rally thereupon fizzled throughout the day.

By the last hour of trading SPX pinned downwards through the 200d sma to 1108.24, but did manage to rally above by the close. The 200d sma has become critical support, after previously being resistance. SPX has pinned downwards through the 200d sma three out of the last four trading days, but managed to close above for five consecutive days now. Hopefully this 200d sma support is not tenuous.

Below is the recent SPX price interaction with the 200d sma, beginning with the Flash Crash on May 6. The 200d sma is the green line. The current close is the yellow horizontal line. Before the Flash Crash, the last time the SPX had been near the 200d sma was on July 13, 2009. SPX broke out above and a strong rally ensued through early August.

As can be seen on the daily chart below, SPX is still above the 25d sma, but below the 100d sma. The early gap up this morning did not quite reach the 100d sma, which is now at 1133.44. The 50d sma is just above the 100d sma at 1137.53.

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