Where is potential support after last week's breakdown?

schmd2000

We are focusing on the 1,000 area for a multitude of reasons.

Per the chart below, the 1,000 area is the site of the SPX's up-sloping 80-week moving average, a trendline that has marked support and resistance in the past.
1,000 marks a 38.2% retracement of the March 2009 low and the April peak.
1,000 is 50% above the 666 intraday March 2009 low.
1,000 is a millennium mark – it proved to be a hesitation point in the summer months of 2003 when the market began to claw back from the bear market lows.


As the proverbial "lines in the sand" continue to be redrawn amid a plunging stock market, a question we have asked is, "What is the catalyst that reverses the slide?" Amid the continued stream of bearish headlines and the weakening technical backdrop, there is little urgency for the shorts to cover and for sideline money to move into the stock market.

With the SPX down nine of the past 10 days, and the PowerShares QQQ Trust (QQQQ) down 11 consecutive days, the market could certainly experience another sharp, short-lived rally. One short-term catalyst that could push the market higher is short covering related to expiring index puts, with July expiration only nine trading days away when the market opens Tuesday morning.

maldini

usamonkey

navybean

Thanks