S & P 500 can not rise beyond the pre-Lehman levels Amid technical resistance

The restoration of all losses spurred by the bankruptcy of Lehman Brothers Holdings Inc. is testing the determination of U.S. bulls stock market.

500 Standard & Poor's rose above 1245 hours before paring its gains, failing for a second day to overcome the closing level before Lehman Brothers collapsed in September 2008.

Climbing above 1251.70, the closing price on September 12, 2008, may mean that investors are increasingly confident in the manifestation of 21 percent since the July 2 is sustainable, as companies reported earnings above the estimated and the Federal Reserve attempts to boost the economy by purchasing bonds. The S & P 500, up 11 percent this year surpassed the previous 2010 high of 1,217.28 hit in April and posted a combined increase of 13 percent in September and October.

"That is obviously a critical level, which is the level at which we realized things were broken," said Ryan Detrick, senior technical analyst at Schaeffer's Investment Research, in a telephone interview yesterday Cincinnati. "Now we're back there, it makes sense that the market takes a pause."

The benchmark rose as high as 1,246.59 at 2:21 pm yesterday, before falling back to 1,238.17. The S & P 500 had a similar motion on 13 December, reaching 1246.73 at 2:46 pm before deleting all your winnings at the last minute to make a lower daily gain since Oct. 26.

Largest drop

On September 15, 2008, the equity benchmark fell 4.7 percent, the biggest drop since the first trading day after the attacks on September 11, 2001, terrorist, as the bankruptcy of Lehman Brothers and declining asset prices led investors to speculate that markets are freezing and the economic slowdown could get worse. Depreciation and related credit losses have totaled more than 1.8 trillion U.S. dollars worldwide since the beginning of the financial crisis and the S & P 500 fell to 57 percent from its peak in October 2007 to March 2009.

While the S & P 500 has risen 84 percent since reaching a 12-year low in March last year, unemployment in a quarter-century high of 9.8 percent has led some investors remain cautious. Pacific Investment Management Co., manager of the largest bond fund in the world, has warned since May 2009 that economic recovery is slower than normal had lower average levels. Capital funds have been more than $ 80 billion in outflows since the beginning of May, according to the Washington-based Investment Company Institute.

Head and Shoulders

The S & P 500 reached a low of 1022.58, 2010 July 2 rose amid speculation some European nations can not pay your debt. Christopher Verrone, chief technical analyst in New York Strategas Research Partners, said a head and shoulder pattern on the base table called the lows of March 2009 and July: S & P 500 will face resistance between 1240 and 1,250.

"It's purely technical movements," Verrone said. The level of 1,251.70 Lehman "has a psychological impact.'s Close to a round number - 1250 - and people put emphasis on round-number resistance.'s In the back of the minds of the people."

The head and shoulders pattern is formed by three consecutive peaks on a graph, the highest in the center. The level that connects the valleys between the peaks known as the neckline. In technical analysis, investors and analysts study charts of trading patterns to predict changes in the security, commodity, currency or index.

The S & P 500 also can take a break after a rally, according to Detrick. He predicts that the proposed measure will make its way to close above 1,251.70 at the end of the year.

"Catching his breath"

"We had this great movement and we are now selling at the end of the day, but it seems that large institutions dumping many of the stocks," said Detrick. "That's an encouraging sign for the bulls. It's just that the market for catching your breath."

The S & P 500 has gained an average of 1.9 percent during the trading days in the last 10 of the year, according to Bespoke Investment Group dates back to 1990. While there are 12 days remaining in 2010, as a gain boost the benchmark to 1,265.18 yesterday's close, above the pre-Lehman.

"You're seeing a turnaround in the market moves every day," said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, who helps manage 240 billion U.S. dollars. For the rest of the year, the S & P 500 recover and rebuild itself for another rally in the first part of next year. "