There are a few reasons that encourage my belief that price support will hold. I think the nearest support is at approximately 1035 on the S&P. The first graph below illustrates the level with the red horizontal line. Another indicator, not shown, is the Bollinger Bands which show support currently at 1041 and the center of the bands range being 1106, same as the 200 MA, serving as a gravitational pull at some point. Also supportive of this view is the volume is declining. This might indicate the number of positions closing is winding down. There is one problem with this point. As I watched the final minutes of trading on Friday, the lows were consistently getting lower, right up to the close. There is still some selling to be completed Monday, maybe a gap low at the opening, followed by more bids, to end higher than the open. (Just wishful thinking.) The second graph below shows that the number of companies in the S&P 500 index trading over the 50 day moving average has fallen to only 46! I think we're close to running on empty on this graph. No matter, Monday is set up to be anything but just another day. Scanner
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