Understanding of the importance of the market and the economy will lead to profitable trades. Stay up to date with our news feeds cheap nfl jerseys directly TraderMongers.com! S & P 500According the Stock Trader's Almanac, the S & P increased only twice in the last 13 years and the first nine trading days, the lowest of each month.
Historically, it is missing the lowest of all seasons, months, many institutions, investors and traders during the month of August vacation with her children before returning to school in September.
Considering the events of August, mid August seems to be stronger than at the beginning and end. The operators seem to sell before the weekend, and follow the lead of overseas markets, after the exchange of Monda
y.
Last week the markets had a hard time breaking through the 1125 resistance level which begins the January 2010 resistance levels. Not enough volume is there during the summer months to push the markets above this level especially during the month of August.
On the daily chart of the S&P 500 we were trading between the cushion area of 144 and 200 day moving averages as traders and investors are cautious looking ahead especially with the upcoming mid-term elections, uncertainty with European debt, and the current Gulf Oil Spill. Now we have slowly broke out of this area after the European banks passed the stress tests. However as we have stated before the markets will remain trading below the January 2010 resistance levels which begin at 1125.
The Market Volatility Index (VIX) has been active due to the seasonal selling trend of the ‘Sell in May' philosophy however seems to stabilizing after the Fourth of July weekend and the anticipation of second quarter 2010 earnings season. Currently the VIX trading below the 144 and 200 day moving averages indicating more riskier approach towards investments and assets.
The Chicago Board Options Exchange (CBOE) Market Volatility Index measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar when the index is trading above 30.
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