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In an uncertain market, the Fast pros often say watch the technicals. And the technicals suggest the market is at an inflection point.
First the bad news: On Monday the S&P breached a key level, closing below 1340.
That's a big deal because 1340 had generated strong support. “We protected 1340 a couple times,” explains trader Steve Grasso.Now the good news: The breech isn't that bad. The S&P closed at 1338.
Now what?Trader Steve Grasso says what happens next should be very telling. If the S&P continues its decline ‘it gets slippery,’ he says. “1305 is the next key level and below that, it's flat on year or 1257,” he says.Looking at historical trends in the market, Grasso can’t help but wonder if the current decline is a sign the market is going to 1257. “If we don’t test flat on year – it will be the first time in 33 years that we haven’t done that,” he says.
Grasso's not inclined to believe this year is the exception to that rule. “If the S&P can’t hold 1340, I’d buy the SDS, ” he says.
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