The market is coming off of its lows today hoping that some sort of agreement will be reached on the fiscal cliff. Obama has returned from vacation early and seems eager to work but I am still being cautious about adding to our names here. Stocks are up big and are still hovering around their 3 year highs so we don’t want to pile in at this top just because the market is giving us the pullback we wanted. However, I might be selective and add to UPRO (the S&P 500 triple leveraged index) if the 1 day technicals show improvement. Let’s take a closer look.
We have come off our lows for the session but failed resistance right at the 38% retracement level. These Fibonacci’s are key when watching intra-day support and resistance levels. Let’s check back at 1:00 to see if we can form some sort of base and surpass the 38% level. If we hold that level, coincidentally, it will be near the 50% retracement level as well on a 200 day chart, not 1 minute. So this 38% ret. level is key.
We got the bounce we were looking for on news that Washington will meet again overnight to compromise on a solution. Even if we are wrong for buying today, the economy is still improving and is cheap for the long term.