Yesterday I said that 1,000 on the S&P represents significant upside resistance. I didn’t think I’d be writing about it so soon but I think 900 represents important downside support.
We’ve only closed below 900 four times: Fri 10/10 (899), Wed 10/22 (897), Friday 10/24 (877) and Monday 10/27 (849). A look at the charts suggests that the market hasn’t stayed below 900 for long and that buyers come out and show real demand at those levels.
It will be interesting to see then if the market can hold 900 especially after what is going to be a very ugly October Jobs Report tomorrow (Fri) morning.
If it can hold 900 in the face of this horrible economic news, I think that’s very bullish because it suggests that these nightmare scenarios are priced in – at least for now.
If it can’t, all bets are off and I wouldn’t rule out new lows in the short term.