SPX Monthly Chart

Here is the monthly SPX chart since a new data point is printed today. This is the fifth month that the index has fallen. All the important monthly levels have failed now verifying the secular bear market. The 10 MA was the initial failure, then price fell under the 12 MA, this is one of Keystone's Secular Signals. The 17 and 20 MA's were holding, however, providing market bulls a sliver of hope. This week that hope disappeared like sand thru their fingers. The black circles highlight the 17 and 20 month MA crosses.

For the chart in general, notice the 2000 dot-com bubble top in 2000, then the start of the Iraq war in March 2003 that marked the bottom, then the more recent October 2007 top that resulted in the Fall 2008 waterfall crash, then the March 2009 bottom that resulted from the announcement of quantitative easing, QE1, then the stutterstep in summer 2010 where the markets were collapsing but Bernanke's QE2 came to the rescue. Now we have rolled off the top and lost the MA's on the way down. The red circles show lower lows with all indicators so the downside from early 2009 more than likely needs retested.

The 1100 level is critical horizontal support and also the 38% Fibonacci retracement for the 666-1375 up move. 1101 is also the 8/9/11 LOD so it seems that fate requires a test of the 1100 level and it will most likely fail. If the market bulls cannot hold the SPX at 1100-1130, then they will lose control of the situation. Since price has now fallen under the 10, 12, 17 and 20 MA's, however, the broad markets already appear to be a lost cause; we are now in a secular bear market. Note how once the 17 and 20 MA's give way, price usually comes back to test them (black circles), thus, currently that area would be 1200-1215.

Projection is sideways to sideways down moving forward, 1100 level is critical, cannot rule a back kiss month during October back up to 1200-ish, but other than that lower prices are ahead for the months, perhaps year or years ahead. As sub 1100 occurs, Chairman Bernanke will probably step in to attempt QE3. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or on any site attatched to this site. Consult your financial advisor before making any investment decision.