Resistance levels

Watch those areas of resistance. As mentioned, the 50day sma is the first line in the sand on the way back up followed by the 10day and 20day moving averages.

What is the 50day for the SPY and SPZ?  SPY 50day = 137.49,  SPZ  50day = 1368.50.

What were the highs for the day in each?  SPY 137.54 and SPZ 1370.50.

That's where the sellers lived for the day, at least in these 2 instruments...and rightly so. Until the bulls can prove themselves to get these back over their 50day moving averages the sellers will look for opportunistic levels such as these.

Similarly, individual stocks will act the same way. For example, look at the chart below of GM. After falling below its 200day sma recently and barely defending its 100day sma yesterday, todays high was $24.28...with its 200day just above at $24.32. There are plenty of stocks that look like GM...JNJ would be one other major that comes to mind.

So if you are short term trading make sure you keep these moving average inflection points on your radar for areas of support and resistance. It is one way to make you money, or at the very least save you money.