This past week has seen nice gains on the S&P however; I urge a sense of caution. As many folks are familiar with my Trading terms while others are not. I provide my blog posts to educate individuals on how to analyze the Markets as well as trading strategies for the S&P, Stocks, T-Bonds and Forex.

Support and Resistance levels (which I call my Trading Levels) on the S&P will be provided as a way to understand likely areas where program trading kicks in. I also look at other areas of where the Market (the S&P) needs to trade (known as Trading Points – this is what I call them). Finally, when there is a major breakout above a Key Trading Level I will provide a projection of how far the next move should be.

Therefore let me quickly explain these terms I use in analyzing Markets (particularly the S&P). The first of my terms is “Trading Levels” which are based on Fibonacci areas (specifically very Key areas). I usually will show Intermediate and Short term Trading Levels to develop targets where I think the market will trade to (both when the Market is retracing/pulling back and moving up). Best used for investing and swing trading “longer term.” Many times on my blog I provide Daily Trading Levels which are meant to be used for short term trading (that day). These have been shown to be more accurate than the “floor trader” Pivot Points. And in futures posts I will explain how to use these Trading Levels in your trading decisions.

The other term I use is Trading Points, I came up with this term to describe where the Market HAS to trade to. It is a point in time that the Market made a move that was “uncharacteristic” and therefore needs to trade to in order to normalize the Market. These Trading Points are usually HIT within a few sessions to two weeks; however, I have seen them take longer.

Now let’s see what the Market has done this past week. Looking over my Intermediate and Short Term Trading Levels (see Charts below) it appears that we will be having another retracement. Volume is not confirming this up-move, neither are my indicators. Therefore we should see a retracement to the following Trading Levels shortly…

Intermediate Trading Levels:
1054.75
1031.25
1020.75


And I have two Trading Points to watch out for and should be HIT…
1053.75 1037.00


Intermediate Chart

Click on image to enlarge!

Click on image to enlarge!