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SPX Hits 20 Point Trading Range

Jim Perez

Don Soubolsky / level3data.com

STOCK MARKET TODAY: “SPX 20 Point Trading Range”

We are in a trading range between 1393 and 1413. A top descending line at 1413 is acting as resistance and the 1393 is the 200 EMA. The SPX futures traded down overnight and will open at the lower end of the range near 1393.

If this range breaks to the downside then the BULLISH VIEW is in play.

LEVEL 3 DATA EXHAUSTION LEVELS:   NEUTRAL on stocks (SPY) and bonds (TLT).  After last week’s 66 point gain off the low of 1343.34, the market has now settled into a 20 point trading range.

If you weren’t reading this last week there were 18 trades exited last week with an average gain of +0.91%.  The neutral exhaustion levels put us in the middle of two views.

BEARISH VIEW: Top of the 1413 range with a downward trend to retest 1343.

BULLISH VIEW:  Upward trend to retest 1433. Expect higher volatility but buy the dips.

We are sellers at the 1407 to 1413 level and buyers of dips at the 1390 to 1393 level of the SPX.

RECAP:   Tuesday November 27th: “Nailed the Low”  

 “Levels Recap:” Our bolded support level 1397.63 proved to be key Tuesday. The low of the day was 1398.08, just 0.45 points from our level.  The 10:30 low was 1400.72 (our level 1400.36).  The SPX then rallied back to 1409 (our level 1409.25) setting up a short trade to the close.

See the 11/27 post for past levels.

LEVELS:   Today November 28th: SPX S&P 500 Index:

Key resistance level for SPX:  S&P 500 index today November 28th – 1398.8,  1400.8, 1404.33

Key support level for SPX: S&P 500 index today November 28th –1390.85,  1389.9,  1386.5

UP 1395.5 1398.8 1400.80 1402.22 1404.33 1409
DOWN 1395.5 1392 1390.85 1389.9 1386.5

THE MOST LIKELY TRADING SCENARIO is that we have seen the highs of the year of $148.11. The series of lower highs and lower lows will most likely continue. We rebounded off the $134.70 bottom to safely close above the 0-line of $139.81. Unless the fiscal cliff issue is resolved the $139.81 support will most likely break down to retest $134.70 low.

SPY 1 Day Data

TLT – Long Term Bonds: Level 3 Data Quant Report signal is NEUTRAL: 11/08 Sell Signal was exited last Thursday with a 1.12% gain. The TLT is trading in and around the 0-line of $124.51 and is now acting as support. The closing price Monday was $125.20.

THE MOST LIKELY TRADING SCENARIO for TLT is to bounce around the 0-line and trade higher to print a new high in the $128 range. The TLT is a mirror image of the SPY.

Level 3 Data Quant Report Exhaustion Indicator is neutral on the TLT.

TLT 1 Day Data