Some support and resistance levels to watch for

I watched some absolutely phenomenal analysis this weekend by great traders like @tickerville and @HamzeiAnalytics. Traders I would not have known or met without Twitter.

In addition to the great analysis already done, I wanted to get some charts out on SPY, QQQQ and VIX to show where some of the support and resistance areas might be and perhaps watch for signs for reversal or continuation. The first thing to notice on SPY and QQQQ is the fibonacci retracement from the pivot high to the low. We are sitting right at the 38% retracement level. Does this mean it's time to short? Absolutely not. We just need to watch this level to give us some guideline on the next move. Also notice the proximity of the 200MA to this level in both ETFs.

The other level of support/resistance is called MOB (Make-or-break) which is an eSignal proprietery indicator. Notice historically how the price either bounces off this level, or continues in the same direction after going through. It is an important tool in my analysis as it acts as a 'magnet' for prices and in most cases the price will often test this level.

For SPY we are at that level (MOB and 38% Fib Retr), with possible continuation to the 99-100 level and then pretty strong resistance around 106-107. A slight correction would take the SPY to around 81-83 level, a more severe correction to around 75, and a really severe correction takes us back to the lows.

Similarly, QQQQ has tested the MOB on a couple of occassions, has gone through the existing MOB level, and next areas of resistance are around 36, and very strong resistance at 38. A slight correction will take the QQQQ back to around 31-32 level.

The VIX is currently sitting at an important MOB level and I am 'expecting' a bouce here in the coming week. The next areas of resistance are around 40, then around 50 and 56-57. The thicker the MOB on the chart, the more powerful that level of support/resistance is.

Please remember these are just points of reference and NOT meant to be hard targets. Historically, prices gravitate towards these points, but not always. A reversal at a point just means there is a good chance for a trend reversal. A continuation through the levels means just that - trend continuation.

One thing for sure though, I believe the market is setting up for a buy on pullback. Additionally, any shorting of stocks should happen on weak stocks in weak sectors. For now, I'd stay away from shorting the leaders, such as financials.

Just some additional things to think about on a lazy Sunday afternoon. :-)