First, the short term lows back on August 9th have not been taken out. Technically, this current pull back is a higher low. As long as that holds, it signals a move up coming. In addition, gold is at obscene levels. As it approaches 1900 per ounce, every small investor is jumping on the gold wagon. In the short term this spells distribution by institutions and a pull back. If gold falls from its over extended levels, money will flow into stocks. Next, Federal Reserve Chairman Ben Bernanke is speaking at Jackson Hole on Friday. This is an annual event and just last year, at the very same event, he debuted the idea of QE2. This will keep shorts from shorting later this week and some shorts will cover. It may give the markets a short term bid. Lastly, the Labor Day Holiday weekend is fast approaching. It is rare to see a market collapse into a holiday. Generally, as volume dries up the markets rise.
These factors are all contingent on the pivot low holding on the S&P 500. This level on the SPY is $110.25. The SPY is the tracking ETF for the S&P. Many key stocks are at major support levels. A strong bounce should be around the corner. To get the next big money making trades, take the seven day free trial to the Research Center and Intra Day Stock Chat. Join the pros to profit with the pros.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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