9/25/2009 - Market Update

The market got a much needed pullback this week and has presented some very nice trading opportunities.  If we take a close look at the SPY, a couple of important events occurred.

1.  The SPY filled the gap left from last October at 107.
2.  The SPY just about touched the 50% fibonacci retracement from the 150 high in 2007 to the 66 low in March.
3.  The SPY is sitting right at the support trend line going back to late June. (60 Min chart)
4.  SPY is sitting right at the 20 day EMA.

Monday will be a very important to day to watch, as many stocks are now sitting at their 20 day EMA.  If we break the trend line support on Monday and close lower, a retracement back to 100 - 101 area on the SPY is definitely on the table.  That would put the SPX at around 1010 - 1014. 

Nevertheless, today was a great buying opportunity to see if the 20 day EMA holds.  If you have been long for a few months, then the most logical play is to stay long until the sell signal is given.