Bob Byrne
SPY Levels

11/5/2009 8:11 AM EST

___________________

1057.50 = 106.25 Strong

1052.50 = 105.75 M

1048.50 = 105.35 Strong

1044 = 104.90 M

1040 = 104.50 M/S

1037 = 104.20 M

1034.25 = 103.90 M

1031.50 = 103.65 M/S

__________________________


The Emini began Wednesday just above 1049.50 (an area I thought offers would build) and managed to trade right up to strong resistance at 1057.50.

Following the fatherly guidance we all wait for from our trusty leaders at the Fed...traders took them back to 1057.50 for another try---and failed.

Yesterday's selling towards the close seemed more like traders yelling "the heck with it" (when 1057.50 stopped the buyers in their tracks) than some viscous sell-off. Inventory was let go and bids were yanked.

For today---sellers will be lurking near 1048.50 and 1057.50 (both strong resistance)...and I continue to think 1064 is in the cards. Bids are waiting to be hit by Debbie Downer between 1037 and 1040...we cracked 1040 during the early morning hours and immediately popped back up.

The bulls need to follow the CSCO kid to the promise land. A sustained trade above 1048.50 opens the door to a quick move towards 1052.50. Trapped (and weak) longs and scared shorts may make the trading choppy and a bit incoherent near 1052.50...but it should not take a Herculean effort to push us through that area and towards 1057.50. Expect Roubini's clan to be lurking near 1057.50...

Trader's need to gun down CSCO on the open if they want to erase the good vibes spreading through technology this morning. If the bears can hold the bulls at 1048.50 they can target moderate support at 1044 and moderate/strong support at 1040. Expect any hard selling near the open to find bids lurking between moderate support 1037 and 1040. A failure by the bulls between that support zone sends the Emini to (and through) 1034.25 in a hurry and towards moderate/strong support at 1031.50.