SPX Daily Chart Testing 38% Fibonacci Retracement and 50 day MA

Note that price is supported by strong horizontal support at 1210 to 1220, the 38% Fib retracement from the October rally at 1213, and the upward rising 50 MA at 1207 or higher.  Price failed last week out of the three-week sideways triangle (red lines in late October and November) and has not back kissed or made any move to indicate a potential fake-out move from the triangle, at least not yet.  Early this week we see if the intial move down from the triangle has staying power, or not.

The loss of the 1210 level would ensure that the market bears will stab under 1200.  A failure of 1210, since it is a such an important confluence as highlighted above, the 1207-1220 area, will be very bearish.  The indicators are in favor of this further weakness.  The light green lines showing lower indicators as price places a slightly lower low than early November.  This means that the price will want to come back down to make lower lows again, even if a bounce should occur in the coming days.

If 1207-1210 fails (a 50 day MA failure will receive lots of attention by talking heads), the next target lower would be the gap fill at 1196 and 50% Fib at 1191. The 1196-1199 area is a strong support cluster so the bears receive another feather in their caps if they move price thru this hefty support area. 1193 is also strong support with the next area of strong support at 1181.  Thus, should 1207-1210 fail, the confluence at 1191-1196 is a likely target.

The market bulls have to regain 1220, then set their sights on 1225 resistance. Watch 1220 and 1210 in tomorrow's session; the move from this range will show which side has the upper hand. The RSI is under 50%, postitive divergence is not in place for the last three weeks so there is no help to bounce price, indicators prefer further weakness, price is under the 20 MA, price also under the 20 week MA, and the 150 and 200 day MA's are negatively sloping, all bearish indications.   The market bulls need to hold 1207-1210 and hope the stochastics now falling into oversold territory will start to provide some turn around upside. The chart technically favors the bears.  This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.