Short-term traders can't stop talking about 1,950, which is considered a critical level for the S&P 500. And on Monday, the market is rising to within spitting distance of that widely watched marker.
The level has frequently served as a turning point for the S&P, increasing its importance. It is also roughly the S&P 500's current 50-day moving average.
A 50-day moving average is merely an average of the prior 50 closing prices, but it can serve as a useful milepost to show about where stocks have been recently. In addition, the mere fact that it's widely watched lends this average added import. On Monday, the 50-day moving average falls at 1,951.62.
And there's a third, more concrete reason why 1,950 is important for traders: The options market has piled on that price. Among options expiring on Friday and at the end of February, call options with a striking price of 1,950 have been the most widely held contracts trading near the money. They are also seeing the most volume of any soon-to-expire call options contracts on Monday.
With so many eyes on 1,950, some expect that trading could get a bit wonky as markets approach it.
"I expect a whoosh through… 1950 and then, as the chasers get into the pool on the long side, I'll get shorter and shorter," Michael Block of Rhino Trading Partners wrote Monday. "That's going to be when the fire starts, at least in the short term."