Magnet and Steel

Now I told you so you ought to know
It takes some time for a feeling to grow
--Walter Egan

A few days back we wondered whether the major indexes might not have a date with the uptrend line off the Spring 2009 lows. For the S&P 500 (SPX), that uptrend line marks at about 1250 currently.

Since then, markets have continued to trade heavy, putting that 1250 level all the more in play.

Shorter term technical analysis provides more suggestive evidence. Multi-month horizontal support highlighted by the lows last March and the 200 day moving average intersect at ~1250.

While many short term indicators suggest an oversold tape, 1250 may be the magnet for a steely SPX.

position in SPX