The stock market is trading solidly higher today. Intervention by the ECB helped push the global markets higher. The SPDR S&P 500 ETF (NYSE:SPY) is trading at $120.83, +1.46 (+1.22%) . The key to knowing whether or not the stock market will go higher is simple. Find a major pivot and watch to see whether the markets close above or below.
The master pivot on the SPY is $121.00. Confirming this level as a major pivot is today’s high of $120.99. In addition, this area is the previous high on September 8th, 2011. Should the SPY close above this high, the markets will have legs until $124.00.
Overall, the markets are enjoying a little bit of reassurance by the ECB and hopes of major QE3 from the Federal Reserve next week. The leaders are leading like Exxon Mobil Corporation (NYSE:XOM), International Business Machines Corp. (NYSE:IBM), Google Inc. (NASDAQ:GOOG).
Simply put, a SPY close below that pivot level is a short on the markets. If we close above, avoid shorts until at least the $124.00 level.
Gareth Soloway
InTheMoneyStocks.com
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