Posted May 27, 2012 17:29
At the beginning of the week, all three major indices rallied around 2%. The general consensus was that it was an oversold bounce. This was true, but once Tuesday came along it seemed as though the rally faded away. The market was up in the morning and just collapsed into the afternoon. None other then European news to bring us down. This dragged into Wednesday as the market dropped to open the day. The market traded sideways into the long weekend.
But What Now?
Many traders sold their existing long positions to reduce their exposure to any negative news coming out of Europe over the weekend or on Monday. If you look at the Bullish standpoint going into the long weekend then you would acknowledge that any bad news has already been baked into the market and any good news should spark the rally. If you look at the Bearish standpoint then you have to realize that there isn’t much possible good news that could come out of Europe because things are so messed up; and that the market should continue to trend lower through the summer.
From the technical standpoint of a Bullish point of View:
From the technical standpoint of a Bearish point of View:
Support: 1275, then 1250, then 1200
Resistance: 1320, then 1300.