Whether the number is 8,000 on the Dow or 800 on the S&P, the stock market has found something of a comfort level from which it refuses to deviate very far.
As they have several times in recent weeks, the averages tested their support levels Friday and managed to bounce back—even in the face of bad news. So while investors have shown little inclination to stage a broad rally, they’ve also eased off the sell trigger once the psychological numbers have been breached.
“Every time we get to 805, 804 in the S&P it bounces. It could be in anticipation of us holding 800 on the S&P,” says Dave Rovelli, managing director of US equity trading at Canaccord Adams. “I think what happens when we get there is the shorts start to cover and the day traders jump in along with them.”
Click here to read the full article…
