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FirstAlert(tm) 7/31: Market Pullback Looms

July 31, 2009 (FinancialWire) (By Frank Kollar) The S&P 500 SPYDRS (NYSE: SPY) and S&P 500 Index (SPX) have both reached resistance levels that may stop the stock market rally, at least for awhile.

After a gap higher open on Thursday, July 30, the S&P 500 SPYDRS reached its 50% retracement resistance level, at $98.80, for the August 11, 2008 to March 6, 2009 decline. After intra-day highs at $99.83, SPY fell back to close at $98.69.

The S&P 500 Index (SPX) also traded well above its 50% retracement resistance level, at 987.47, for the August 11, 2008 to March 6, 2009 decline. The index then fell back before the close and finally ended the day at 986.75.

The 50% retracement level is strong resistance and the market reacted to it midday by selling off into the close. Those round numbers at 1000 for the SPX and 100 for the SPY are also tough, at least initially, to surpass.

Look for a correction in the range of 5% to 6% in coming days.

On the flip side, a decisive close above this level would likely propel these shares to the 61.8% retracement resistance level all the way up at SPX 1064 and SPY 106.

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 ETF Strategy has a position in the S&P 500 SPYDRS.)

FirstAlert(tm) The Investrend Events Calendar showcases ANR Special Meetings of Stockholders; PLCE Shareholders Meeting.

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 16 advancers versus 9 decliners. Volume leaders were led by Citigroup, Inc. (NYSE: C) trading 168,301,400 shares closing at $3.14 (down 2.5%), the SPDR Trust ETF (NYSE: SPY) trading 58,394,415 shares closing at $98.67 (up 1.0%) and the Select Sector Financial Select Sector SPDR Fund (NYSE: XLF) trading 41,807,281 shares closing at $12.88 (up 2.3%). Of last session’s Greatest Percentage Losers, stocks taking the greatest monetary losses were led by Akamai Technologies Inc. (NASDAQ: AKAM) trading on volume of 18,709,172 shares (losing $671.8 million), Alliance Healthcare Services, Inc. (NYSE: AIQ) trading on volume of 577,700 shares (losing $108.5 million) and Inovio Biomedical Corporation (AMEX: INO) trading on volume of 5,879,900 shares (losing $74.5 million). Of last session’s Greatest Percentage Winners, stocks making the greatest monetary gains were led by First California Financial Group, Inc. (NASDAQ: FCAL) trading on volume of 8,198 shares (gaining $16.4 million), InfoLogix, Inc. (NASDAQ: IFLG) trading on volume of 5,700 shares (gaining $3.6 million) and Amerityre Corp. (NASDAQ: AMTY) trading on volume of 78,283 shares (gaining $1.8 million).

The statistical source for deriving each day’s The FirstAlert(tm) Money Index is (

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Happy Birthday: George Liberace, Milton Friedman, Curt Gowdy, Ahmet Ertegun, France Nuyen, Geraldine Chaplin, Evonne Goolagong, Mark Cuban, Wesley Snipes, J. K. Rowling, Dean Cain.

Today in History: The oldest recorded eruption of Mt. Fuji occurred in 781. On his third voyage to the Western Hemisphere in 1498, Christopher Columbus became the first European to discover the island of Trinidad. Daniel Defoe was placed in a pillory for the crime of seditious libel after publishing a politically satirical pamphlet in 1703, but was pelted with flowers. The radio mystery program The Shadow aired for the first time in 1930. At Idlewild Field in New York in 1948, New York International Airport (later renamed John F. Kennedy International Airport) was dedicated. In 164, Ranger 7 sent back the first close-up photographs of the moon, with images 1,000 times clearer than anything ever seen from earth-bound telescopes. Apollo 15 astronauts, in 1971, became the first to ride in a lunar rover.

[FirstAlertTM was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information ( The opinions expressed in FirstAlertTM do not necessarily reflect the opinions of Investrend.]

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