With the Dow trading negative on the year and the S&P slipping below it’s 200-day, is the market doomed to the malaise of last summer?
Now, more than ever, the Fast Money traders suggest watching a few key technical levels as you attempt to answer that question.
S&P Technicals
Steve Grasso says in the near-term how the market behaves between 1285 and 1275 will be telling.
1285 was a level of strong resistance last October – 1284 is the 200-day moving average and 1275 was the Egypt bottom. The range should generate strong support.
However, if it doesn’t – Grasso thinks it’s likely the market trades down to flat on year which is 1257.
CBOE Volatility Index
Both Pete and Jon Najarian suggest keeping a close eye on the Vix. “Ever since the Vix broke above the 50-day on May 3rd, Pete Najarian has been concerned.
“Then on May 4th it broke above the 100-day at 19. Now it’s above the 200-day above 25,” he says. That’s a negative trend and a cause for concern.
“Not until the Vix trades back down to about 19 would I start to feel bullish again,” he tells us.
Posted by CNBC's Lee Brodie
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Trader disclosure: On June 1, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long FB CALL SPREADS; Jon Najarian is long DAL CALL SPREADS; Jon Najarian is long JPM CALL SPREADS; Jon Najarian is long GS CALL SPREADS; Jon Najarian is long VIX CALL SPREADS; Jon Najarian is long CIGX; Jon Najarian is long DDMG; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long GLD; Pete Najarian is long AAPL; Pete Najarian is long AAPL CALLS; Pete Najarian is long C; Pete Najarian is long GDX CALLS; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long PEP; Pete Najarian is long FB; Pete Najarian is long JOY; Josh Brown is long COP; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long XLU; Steve Grasso is long ZAZA
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