S&P (e-mini) futures 1st August 2011 recap

With a 'gap' open from Friday's lows, and also the S&P already trading near the Monthly 50% level...

My view is down on open 8.5 to 14 points towards the channel lows

S&P Weekly and daily Range

S&P sell off on open, as the market was rejected down 14 points from a multiple of timeframe 50% levels (Daily and monthly)

However, the trend kept on going down, completing the break and extend pattern into this week’s lows @ 1271, before the S&P found some buying support.

Is the S&P going to rise upwards from these lows???

It could, but a couple things traders should consider…

#1) trends that originate from the monthly 50% levels in the first week of the month can often continue
 to trend outward during the current 5-day cycle:- top to bottom. Therefore the channels in the 5-day
range will be important

And more importantly…

#2) the failure to reach a 4 trillion spending cut (only 2.5) as part of the compromise on raising the debt ceiling hasn’t met Standard & Poor’s requirements.

This has the potential to see the US lose it’s AAA credit rating. If this is announced it will send markets lower, with a minimum move towards 1251, and the August lows.

Therefore the current downward trend can stabilise around these lowerlevels, but, if the S&P cuts the credit rating of the US, then markets will spike lower on the news.










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