SPX S/R Week of 12/27/11

The SPX is playing out high drama as one year ends and another begins. Price pierced up and thru the 200-day MA on Friday giving the market rally strong stret cred.  Watch for a back kiss of the 1259. Note that Keystone's 12-Month MA Cross Secular Signal highlights a level of 1281. The signal has forecasted a secular bear market for about five months now, as the August crash began, but now the SPX is only 16 points away from signaling that the broad markets are moving back into a secular bullish environment. This development will have a huge bullish impact on markets, so SPX 1281 is a big deal, a game-changer, should it occur.  Interestingly, the month-end prints occur on Friday, only four trading days away. So this price versus 12-month MA fight will supply high drama for the short week ahead.

For the SPX, starting on Tuesday at 1265, if the futures are green, any amount of green, even pennies to the plus side, the market bulls will celebrate the start of the week and send the SPX straight up into testing that strong resistance at 1267-1268, and 50-week MA. If price punches thru that resistance cluster next stop is 1276-1278.  The market bears need to start the new week off on a sour note, perhaps hoping that many traders received coal in their stockings, and push the SPX 11 points lower to lose that 1254 handle.  If you see a 1253 handle print, the markets will accelerate much lower with 1247 for starters. A move thru 1255-1265 is sideways action. Markets remain at the mercy of Europe news. The semiconductors, SOX, must move higher to supply further bull market fuel, thus, on Tuesday, whichever way the SOX moves so will the broad indexes.

·         1289

·         1287

·         1286

·         1285

·         1282

·         12-month MA 1281.40 (Keystone’s Secular Signal)

·         1280

·         1278

·         1277

·         10-month MA 1276.35

·         1275

·         1272 (LT S/R)

·         1270

·         50-week MA 1268.31

·         1268

·         1267

·         Friday HOD 1265.42

·         Friday Close 1265.33

·         1263

·         1262

·         1261

·         1260

·         200-day MA 1259.19

·         1258 (1257.64 is the starting number for 2011)

·         1257 (3/16/11)

·         Friday LOD 1254.00

·         1254

·         1253

·         1252 (9/14/08 pre-LEH bk)

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

·         1247

·         1244

·         1242

·         1240

·         1238

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

·         1233 (LOD 12/16/10)

·         1229