fbpx In focus: Bears gain strength | Option Strategist

In focus: Bears gain strength

By Lawrence G. McMillan

The bears have slowly been gaining strength over the past week. The easiest way to tell is that the Standard & Poor’s 500 Index has slowly been trending lower and lower. The accumulation of this selling has produced some oversold conditions, though.

The market took a rather sharp hit overnight last night (over further negative rumors of out Europe), recovered and saw another selloff this morning. It survived those bear raids and rallied. For three days in a row, the low on the S&P 500 SPX +0.32%  has been in the area just above 1310, so that is certified support. There is resistance at 1330. This rally is in response not only to that support, but also to some short-term oversold conditions that had built up, most notably in breadth.

The major trend on the $SPX chart is still down, as there has been a series of lower lows and lower highs ever since the top on the day that Bid Laden’s slaying was announced.

To read the full article, subscribe to The Market Watch Options Trader.

Share this

Option Strategist
Blog Search

Recent Blog Posts

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.