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Why the 3000 Level for the S&P 500 is Very Important - True Edge Trading

Why the 3000 Level for the S&P 500 is Very Important

The broad market was up BIG today, and everything is suddenly looking rosy. But the 3000 level for the S&P 500 is one to watch closely – here’s why.

The S&P 500 is close to 3000 and its 200 period moving average.

First of all, 3000 is a big, easy to remember round number. The market likes these numbers. It may seem ridiculously simplistic, but it’s true. One of the reasons is that it’s easy for news organizations to remember and feed their audience. But even institutions like to use these major round numbers as well.

But there’s another reason to watch this S&P 500 level closely. Look at the chart above, and you can see the indexes 200 period moving average is hovering around the 3000 mark. The 200 period moving average is a major market indicator, and since the index is only about 50 points away we could see it come into play as early as tomorrow.

News pushed the market much higher today, but traders all over the world will be watching the S&P 500’s reaction to the 200 period moving average – and the 3000 level. Watch it as well – the reaction to either of these will help you navigate the market successfully.

Jeff Drake
True Edge Trading