- Analytical Commentary -

October 9, 2009 (FinancialWire) (By Frank Kollar) — Both the S&P 500 Index (SPX), and its tracking ETF the S&P Deposit Receipts (NYSE: SPY) have pulled back in classic 3 wave declines over the past two weeks.

But now, as they approach their prior 2009 rally highs, they also face do-or-die resistance levels. A failure to make new highs will likely result in declines and a test of their correction lows, while a breakout above their old highs would pave the way for another leg up in this advance.

For the SPY, the resistance level to beat is at $108.06. For the SPX, it is at 1080.15. On Thursday, October 8, the SPX closed at 1065.48, 1.4% below resistance and the SPY closed at $106.77, and 1.2% below resistance.

An intra-day high above these levels is not enough. Both the SPY and SPX must make a decisive close above them.

The next few trading days are crucial.

If we do move lower, initial strong support should be found around SPX 848 which is the 50-day moving average for this big cap index (for the SPY the 50-day moving is at about $85.00).

(The  http://www.fibtimer.com ETF Strategy has a position in the S&P 500 SPYDRs.)

[Go to http://www.financialwire.net/?s=frank+kollar to see more commentaries by Frank Kollar.]

FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ/AMEX 25 Most Actives and NYSE/NASDAQ/AMEX greatest Percentage Losers and Percentage Winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market. Of the Most Actives, last session’s trading showed 17 advancers versus 8 decliners. Volume leaders were led by Citigroup Inc. (NYSE: C) trading 52,732,800 shares closing at $4.65 (up 0.2%), the PowerShares QQQ Trust Series 1 (NASDAQ: QQQQ) trading 37,008,851 shares closing at $42.24 (up 0.4%) and the SPDRS Trust ETF (NYSE: SPY) trading 33,077,474 shares closing at $106.61 (down 0.8%). Of last session’s Greatest Percentage Losers, stocks taking the greatest monetary losses were led by Barclays PLC (NYSE: BCS) trading on volume of 31,200 shares (losing $7.539 billion), NCR Corp. (NYSE: NCR) trading on volume of 2,943,100 shares (losing $309.5 million) and Barnes & Noble Inc. (NYSE: BKS) trading on volume of 1,552,700 shares (losing $156.7 million). Of last session’s Greatest Percentage Winners, stocks making the greatest monetary gains were led by Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) trading on volume of 25,091 shares (gaining $34.5 million), Plug Power Inc. (NASDAQ: PLUG) trading on volume of 2,368,738 shares (gaining $26.0 million) and EntreMed Inc. (NASDAQ: ENMD) trading on volume of 621,004 shares (gaining $23.1 million). [Go to http://www.financialwire.net/?s=%22%27Money+Index%27+Synopsis for all the most recent FirstAlert(tm) "Money Index" Synopses.]

The FirstAlert(tm) Economics Calendar lists International Trade for August (8:30 a.m.).

The FirstAlert(tm) Events Calendar showcases no events today.

FirstAlert(tm) Website of the Day: http://www.space.com/scienceastronomy/super_photo_041006.html

Quote of the Day: “Peace is a good thing, and so is salmon when it’s smoked.” Sean Ono Lennon

Today is: Independence Day in Uganda, Leif Erikson Day.

Happy Birthday: Max von Laue, Aimee Semple McPherson, Walter O’Malley, John Lennon, John Entwistle, Jackson Browne, Tony Shalhoub, Scott Bakula, Annika Sörenstam, Sean Lennon.

Today in History: A supernova observed in 1604 was the most recent supernova to be observed in the Milky Way and was studied by German astronomer Johannes Kepler. The Collegiate School of Connecticut (later renamed Yale University) was chartered in Old Saybrook, Connecticut, in 1701. In a naval engagement on Lake Erie during the War of 1812, American forces captured two British ships. The Washington Monument officially opened to the general public in 1888. The 2005 Atlantic hurricane season was the first on record to use a name beginning with “V.”

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