That makes 2730 an important level for the S&P 500. That\u2019s the mid-point between the stock market\u2019s all-time high and the closing low of the recent correction.<\/p>\n
The index closed above that level on Friday\u2026 not so much above it that it completely negates the possibility of a retest of the lows. But it was a strong enough move to force bearish traders to consider at what point they\u2019ll cry \u201cuncle\u201d on their short trades.<\/p>\n
As I mentioned on Friday, for me that point is a close above 2754. Let me explain how I got to that number.<\/p>\n
Take a look at this 15-minute chart of the S&P 500\u2026<\/p>\n
![\"\"](\"https:\/\/jeffclarktrader.com\/market-minute\/wp-content\/uploads\/sites\/19\/2018\/02\/Screen-Shot-2018-02-26-at-11.03.02-AM.png\")
<\/p>\n
Over the past five trading days, the S&P has waffled in a wide trading range between support at 2700 and resistance at 2754. A break of either of those levels should create a move of up to 50 points in the direction of the break.<\/p>\n
In other words, if the S&P closes above 2754, then look for a move up to 2800. If the index breaks below 2700, then it should quickly move down towards 2650.<\/p>\n
I still favor the downside here and the potential for a retest of the lows of the correction. But, if the S&P 500 closes above the 2754 level, then it will be hard to argue a bearish stance. The bulls will have regained the momentum.<\/p>\n
Best regards and good trading,<\/p>\n
![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
<\/p>\n
Jeff Clark<\/p>\n
P.S. <\/strong>Over 30 years ago, I made a discovery that cemented my success as an option trader.<\/p>\n And ever since then, I\u2019ve been using it to book countless triple-digit gains for my readers<\/u> \u2013 not the big-money firms knocking down my door and asking me to reveal it.<\/p>\n To learn more about it \u2013 and why tomorrow, February 27th<\/sup>, may be one of the most important dates in the market this year \u2013 check out this presentation my team and I just put together<\/a>.<\/p>\n Today, some reader responses to last Friday\u2019s essay, \u201cHow to Profit When the Market Goes Nuts<\/a>\u201d\u2026<\/p>\n Great thoughts\u2026helped me understand your analysis so much better. Thanks.<\/p>\n \u2013\u00a0William<\/strong><\/p>\n<\/blockquote>\n <\/p>\n Jeff, I am a former options and commodities floor trader and love trading. I find your insights very helpful to my “gut” instincts. I trade around your suggestions quite often and appreciate your longer-term view. e.g. I am now trading from the short side and have bought\/traded the SPY puts 3 times and just pick a number to sell them if the market tanks.<\/p>\n As you know, unless you are watching the market constantly, which I don’t, options (other than deep in the money) don’t necessarily track the underlying security exactly, so picking a sell price is a guess. I suspect this strategy will not work one of these times and it probably means that if the market does test 2581, I will be out of my position. Keep up the good work.<\/p>\n \u2013 Karen<\/strong><\/p>\n<\/blockquote>\n <\/p>\n Jeff, your dad was a wise man. Thank you for sharing his wisdom<\/a>. I\u2019m pretty sure I\u2019m going to remember his quote for the rest of my life. Keep up the great work.<\/p>\nReader Mailbag<\/strong><\/h2>\n