In a fit of bearish prudence, it was noted yesterday on Twitter:
With the dramatic reversal that has taken place today, 2940 becomes that much more important for the market.
The S&P 500 has been walking a tightrope with resistance at 3000 for several weeks now. To put it in the simplest terms possible, walking a tightrope is great when you are steady and balanced. However, when you start becoming erratic and volatile, walking that tightrope turns from magnificent to potentially catastrophic.
Large volatility expansions around areas of significant historical resistance, as 3000 on the S&P 500 always has been, are more often than not warning signs by the market of impending instability. As of now, we have S&P 500 2940 as a very important marker for how serious this instability can become.
Should the market continue its erratic ways, closing the week below 2940 on the S&P, it becomes a very precarious situation, very quickly. Needless to say, with the S&P at 2953 currently, the market needs to get its act together soon.
2940 for the S&P is everything this week.
