S&P 500 Forecast From Nov 05, 2012 - US Presidential Election is in Focus! (Expected Trading Range: 1371 - 1437)
Nov 02, 2012 - S&P 500 closed today at 1414.20 which is about 2.26 points up compared to last week close of 1411.94 on Oct 26, 2012. S&P 500 was trading between 1405.95 and 1434.27 which is a swing of about 28 points. US Stock exchanges are closed for two days (Oct 29 - 30, 2012) due to Hurricane Sandy. Hurricane Sandy is expected to cost between $15 - $40 billion dollars. The actual damage will come out in the coming weeks. New York and New Jersey are the two states that got hit heavily with Hurricane Sandy.
Last Week Analysis - Hurricane Sandy Forces Market to Close for 2 days
Hurricane Sandy forces US stock market to close for two consequtive days - Oct 29 - 30, 2012. The weather related closure did not happen for the last two decades. The panic over Hurricane Sandy dominated the last week. Besides
the long waited US presidential election has come. We will know the election results as soon as 11:00 PM of Eastern Time on Tuesday Nov 6, 2012.
As a thumb rule, you will get a cheap gas price during the election week. No matter how it happens everytime, but it is happening everytime. Oil prices have slumped for third consequtive week. The stronger dollar pushed down the gold prices also.
With respect to US long term treasury prices, TLT closed today at 122.27 which is near flat from the last week close of 122.64. TLT reached its all time high point of 132.21 on July 25, 2012. In the short time, TLT may make a siginificant upward move. So if you are trading on US treasuries in the short term, it is a good time to take long position on US treasuries.
Last Week Low: 1405.95
Last Week High: 1434.27
If you are a medium or long term conservative investors,
1. Initate short position on US treasuries.
2. Liquidate your long positions on Stocks and convert them to cash (US$)
For Speculators and Intraday Players - Bet on Volatility
CBOE Volatility Index (VIX) closed today at 17.59 which a near flat compared to the last week close of 17.81. Now the market is showing some fear compared to the earlier weeks, but still VIX is going to make a powerful upmove Since fundamentally the US market is very week due to unemployment and slumping house prices along with US debt downgrade. Always fundamental wins in the long run. You can consider taking long positios on VIX also.
Only if you are day trader, you can have the following options:
1. Buy 1X OTM call option and 2X OTM put option - Long Strip.
2. Long Stocks and stop loss orders
3. Long Stocks with long put options
Note: OTM - means Outside the money.
Next Resistance Levels:
strong resistance level at: 1433.06 set on Aug 03, 2007
strong resistance level at: 1440.70 set on Nov 23, 2007
strong resistance level at: 1453.55 set on Sep 07, 2007
strong resistance level at: 1500 - crazy market move
strong resistance level at: 1,530.23 set on May 30, 2007 (first closing high after dot com bubble)
strong resistance level at: 1,552.87 set on Mar 24, 2000 (all time high during dot com bubble)
strong resistance level at: 1,565.15 set on Oct 09, 2007 (all time high during housing buble before sub prime crisis)
Next Support Levels:
strong support level at: 1426.35 set 50 Days EMA.
strong support level at: 1372.42 set by 200 Days EMA.
strong support level at 1189.40 set on Nov 26, 2010
strong support level at 1119.46 set on Aug 08, 2011
minor support level at 1064.59 set on Aug 27, 2010
strong support level at 1022.58 set on Jul 02, 2010
strong support level at 1036.18 set on Oct 30, 2009
strong support level at 946.21 set on Jun 12, 2009
strong support level at 827.37 set on Sep 27, 2002
strong support level at 683.38 set on Mar 06, 2009
strong support level at 638.73 set on Jul 19, 1996 - Might see this number again when completing double dip bottom.
Posted on Nov 04, 2012