SPX S/R Week of 10-17-11

The SPX closed at 1224.58, just under the strong critical resistance cluster at 1225-1227. Interestingly, this close was at the highs and despite all the bullish market strength last week, the SPX never even pierced the 1225 level to the upside. The SPX moving up and thru 1225-1227 is a game changer and ensures bull strength moving forward. This week we see what she's got.

For the Monday session, the market bulls only need to see green futures, even barely green, since that will be enough to drive the index up into the 1225-1227 resistance for a first try at punching thru this strong ceiling and move on to 1233. The market bears need to back track down to touch a 1205 handle, if so, the bears will immediately test the strong floor at 1204 and more than likely drop several handles under. A move thru 1207-1223 is sideways slop. 

The Dow Industrials turned positive for the year last week but the SPX needs 33 more handles to attain the 1258 level to get back to the starting number. For this week, focus on 1242, 1227, 1225, 1220, 1209, 1207, 1204 and 1198. It will all depend on the behavior of the financials, utilities and volatility. The semiconductors and retail sectors have caused the recent market rally and continue to act as pillars of support.

·         1268

·         1262

·         1259

·         1258 (1257.64 is the starting number for 2011)

·         1257 (3/16/11)

·         1252 (9/14/08 pre-LEH bk)

·         1249 (LOD 3/16/11; failure at this level 8/4/11)

·         1247

·         1242

·         1235 (12/15/10; also HOD 12/7/10 large volume)

·         1233 (LOD 12/16/10)

·         1227 (HOD 11/9/10)

·         1226 (11/5/11)

·         1225

·         1224 (12/7/10 large volume)

·         1222

·         1220 (HOD 4/26/10)

·         1219

·         1217 (4/23/10)

·         1215

·         1213

·         1210

·         1209 (HOD 4/29/10)

·         1207 (4/29/10 Top)

·         1206

·         1204

·         1202

·         1200

·         1199

·         1198

·         1196

·         1193 (9/15/08 post-LEH bk)

·         1192

·         1189

·         1188

·         1186

·         1185

·         1184

·         1183

·         1181

·         1179