Markets Move on Buffetts 5 Billion Dollar Bank of America Investment

The S&P 500 index was higher overnight as news of Warren Buffett buying 5 billion dollars worth of troubled Bank of America preferred stock hit the news wires. Rumors were already supporting the markets as traders suspect Federal Reserve Chairman Ben S. Bernanke may announce steps to boost the economy in his speech tomorrow from Jackson Hole. The overnight move extends this week's short covering rebound.

Stochastics and the RSI have turned bullish signaling that sideways to higher prices in the SP 500 are possible near term. Closes above last week's high crossing at 1206.50 are needed to confirm that a low has been posted. Closes below this month's low crossing at 1103.20 would renew the decline off May's high.

First resistance is the 20 day moving average crossing at 1184.68. Second resistance is last week's high crossing at 1206.50. First support is this month's low crossing at 1076.10. Second support is the 87% retracement level of the 2010-2011 rally crossing at 1047.03.