Saturday, May 25, 2013

SPX Support, Resistance (S/R) and Moving Averages for Trading the Week of 5/28/13

SPX support, resistance (S/R), moving averages and other important levels are provided below for trading the week of 5/28/13. The SPX punched out new all-time highs again last week at 1687.18 (intraday) and 1669.16 (closing) but finished lower for the first down week after the 4-week upside parabolic move. Price closed the week exactly at the very strong 1649-1650 S/R. For Tuesday, as the new week of trading begins (markets are closed on Monday in Observance of Memorial Day), the bulls need to move above 1650 resistance and the 1655 R will be tested in a heartbeat. Since the SPX closed at the highs, any positivity in the futures overnight Monday night will light the path higher. The bears need to push under 1637 to accelerate the downside. The 1633-1637 area is a strong confluence of support and was tested twice late last week with the bulls holding the line. If the 1633-1637 support fails, price will test 1626-1627 S in a flash. A move through 1638-1650 is sideways action for Tuesday.

The SPX came down to the 20-day MA at 1633.71 but did not touch. This is surprising because price will usually at least tap on the 20-day MA for a back test when in such close proximity. The candlesticks for Thursday and Friday show long lower shadows, due to stocks recovering during the day due to the Fed POMO pumps, forming a potential tweezer bottom that would set up a market bounce for next week. The CPC put/call prints 1.26, the highest level since the May 2012 selloff, which is typically a place to bring on longs for a bounce, however, any market selling will likely spike the CPC higher to 1.3, 1.4 and 1.5. The NYMO low reading also indicates a potential bounce on tap.

The plus side for the bears is that the volume was so anemic on Friday, vapor and fumes, the lowest since the Christmas and New Year's holidays, that the market signals are mixed and need a few days to show their true colors. Also, the SPX daily chart indicators are all weak and bleak wanting to see lower lows in price even if a bounce occurs. The 8 MA remains under the 34 MA on the 30-minute chart signaling bearish markets for the hours ahead, however, the 8 MA is heading upwards for a positive cross of the 34 MA to place the bulls back in charge to begin the new week. The Tuesday opening bell is critical. Any positivity in futures will create the market bounce as discussed above. The bears must drive the SPX lower immediately after the opening bell to drive the 8 MA lower and keep the bears in control. Any news from Japan, or action in the JGB's and dollar/yen currency, will impact the U.S. markets come Tuesday morning. A higher dollar/yen moves markets higher. A lower dollar/yen moves markets lower.

·         1687 (5/22/13 All-Time Intraday High: 1687.18) (5/22/13 Intraday HOD for 2013: 1687.18) (Previous Week’s High: 1687.18)
·         1675
·         1673
·         1669 (5/21/13 All-Time Closing High: 1669.16) (5/21/13 Closing High for 2013: 1669.16)
·         1666
·         1661
·         1655.17 (10-day MA)
·         1655
·         1650
·         1649.78 Friday HOD
·         1649.60 Friday Close – Tuesday Starts Here (Markets Closed Monday)
·         1649
·         1647
·         1636.88 Friday LOD
·         1636 (Previous Week’s Low: 1635.53)
·         1634
·         1633.71 (20-day MA)
·         1633
·         1632
·         1627
·         1626
·         1624
·         1623
·         1622.42 (200 EMA on 60-Minute Chart a Keystone Market Turn Signal)
·         1620
·         1618
·         1617
·         1614
·         1600
·         1599
·         1598 (May begins at 1597.57)
·         1597
·         1593 (4/12/13 Market Top: 1593.30)
·         1592.17 (50-day MA)
·         1589
·         1586
·         1583
·         1581
·         1579
·         1576 (10/11/07 Intraday High: 1576.09)
·         1569
·         1565 (10/9/07 Market Top: 1565.15)
·         1564
·         1563
·         1561
·         1556.42 (20-week MA)
·         1556
·         1553 (10/31/07 Top: 1552.76) (3/24/00 Top: 1552.87)
·         1552
·         1551
·         1548.77 (100-day MA)
·         1548
·         1546
·         1544
·         1539
·         1536
·         1531
·         1528 (3/24/00 Closing Top: 1527.46)
·         1525
·         1524 (12/11/07 Top: 1523.57)
·         1521
·         1520
·         1518
·         1516
·         1514
·         1512
·         1509
·         1505
·         1503.01 (150-day MA; the Slope is a Keystone Cyclical Signal)
·         1503
·         1500
·         1498 (12/26/07 Top: 1498.85)
·         1495
·         1493.09 (10-month MA)
·         1489
·         1485
·         1484.90 (200-day MA)
·         1481
·         1476
·         1475 (9/14/12 Intraday HOD for 2012: 1474.51)
·         1472.70 (12-month MA; a Keystone Cyclical Signal) (the cliff)
·         1472
·         1468
·         1466.21 (50-week MA)
·         1466 (9/14/12 Closing High for 2012: 1465.77)
·         1465
·         1461
·         1460
·         1457
·         1456
·         1453


  1. KS,

    Does the high $CPC value of 1.26 and the low $NYMO value of -40.9 indicate a potential bottom in the S&P in your opinion?


    1. Yep, potential near-term bottom but since the CPC is finally moving upwards, like May 2012, the door is open for bears to walk through. It would have to be this week or the bulls may take over again for a couple weeks.

  2. hi KS,

    I've got one question, please.
    There's a trader called Oscar Carboni that called for last week downside move as a "holyday reversal" - he said that in front of a longer period of non-trading (i.e. week-end of 3 days) the traders have a downside bias and this inclination might not have followthrough next week. He said "not fall in love with the downside".
    This concept is the opposite of the concept that in front of a longer period of non-trading (longer week-end) the market tends to have an upthrust inclination.
    What's your opinion on this?
    Considering the prints of CPC and NYMO i'm a little in doubt regarding the continuation of the downside move next week.
    It's also the last trading days of May (EOM-end of month). How might "end-of -month window dressing" affect stocks?

    Considering all this, what do you think?

    According to my observations, my trigger levels are : 1621 - if broken to the downside the trend might just speed it up to south and 1656 - if broken to the upside , the market might head to north on charts with a double-top possibility of new highs.
    Aside form technical signals (VIX, others) what do you think about next week as orientation projections?

    Thank you,

    1. correction: " 1656 - if broken to the upside , the market might head north on charts with a double-top possibility OR new highs."


    2. Nope, the bias is to the upside ahead of the holiday, simply look at the Other Signals page. He may be discussing some other metric that considers the move through the holiday. VIX will likely tell the story. If markets move higher out of the gate this week, using NYMO -40 as a near-term bottom, but the VIX does not drop under 13.13, the bears are fine. If the markets bounce and the VIX drops under 13.13, the bulls will have legs and take the markets up for a potential M top.

    3. Thank you KS for your answer.
      look, as a proof of not trolling here, look at where he's calling for "holiday reversal".

      maybe i've got it wrong (a problem related to my english level), although i'm sure i've got it well.

      Thank you,


  3. KS, you mentioned CPC and NYMO both indicate that a bounce may be on tap next week for the indexes, so that was it, only -38 points corrected, ~2%?
    Oh, I'm so disappointed!
    So the Fed's gonna adjust Consumer Confidence and GDP to meet their goal for market to continue climb bullishly..?
    Bears become dead cat again:(

    1. Perhaps, the new week is very important. If the path ahead is like the May 2012 selloff, then the CPC will climb to 1.3, 1.4, 1.5 maybe higher as panic sets in. Likewise, the NYMO can drop further, -40, -60, -80. It was a surprise to see CPC print 1.26 but Friday was a funny day with the low volume of the year.

  4. So with such a low volume, should CPC and NYMO be taken into account? Thanks!

    1. The low volume does provide a question mark, also volatility dropped not confirming the higher CPC.


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