The S&P 500 is fast approaching its 200 day moving average. This is the “line in the sand” for many traders. There are a large number of shorts betting the market will decline – hoping that Europe won’t be able to fix their banking problems. If the S&P 500 can break through the 200 day moving average, then I think we will start to see these shorts start to cover their positions (by buying back into the market). This will give the equity market the fuel it needs to give us a nice year end rally.
As of midday – the Nasdaq Composite is already breaking through this barrier:
Usually tech leads the way – so this this will be an interesting week to watch the bears and bulls battle it out.