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Peter and Realtraders,
Right now, the 1000 level mark on the S&P Futures is considerably more
important than the 8000 level of the Dow. The reason: If you take a look
at the March S&P futures contract, you will notice that back in October,
this market made a high of 1002.50 and subsequently sold off. Therefore,
beside from psychological relevance of these thousand point marks, there is
'technical' resistance at this level as well. Those who went short the
market over the last few months, focus on this area as a critical place
where there analysis may have been wrong. As such, if the market should
exceed the old high, these short sellers will need to cover their
position...thus buy the market. At major technical resistance levels (such
as this one), this buying can cause a massive short squeeze or a 'run the
stops' situation.
What will be important to us, as traders, is to determine if the move
above this level will reverse quickly in which it forms a major 'shooting
star' (a Japanese candlestick bearish formation) or if the move above this
level can be sustained. If it is the latter, this will be a major breakout
of the large "Flag" formation that we have been in for several months.
The next several days can be very important.
Hope this helps,
John Boggio
At 05:03 AM 1/26/98 -0600, Peter Namtvedt wrote:
>
>Why would 1000 on the SP be an important point (or 8000 on the DOW)? What
>is special about these round numbers?
>petena9090@xxxxxxxxxxxxxx
>
>
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