On the bear side, a drop under 1626 will indicate that the markets are in trouble from the start. If the 1623-1624 fails on Monday, the downside will accelerate to tag 1618 and then set up a test for the 50-day MA at 1613.54. Note how price is moving through a bracket formed by the 20-day MA above and 50-day MA below, thus, happy bulls above 1642 and happy bears under 1614. The battleground at 1614-1642 continues to tighten moving forward (20-day MA is dropping and 50-day MA is rising) forcing a decision this week for markets. The move out of this 20 and 50-day MA bracket is very important since it confirms the preferred direction and price can run at least 40 to 60 handles further in the preferred direction. The previous week's highs and lows provide a final confirmation of the winner, bull or bear.
A move through 1625-1640 on Monday is sideways action and will likely indicate that markets want to maintain a sideways posture until the FOMC rate decision, forecasts and press conference on Wednesday afternoon. Very simply, the directional move from the 1626-1627 S/R will tell a lot from the opening bell. The importance of the 200 EMA at 1629.10 cannot be understated. Bad things will happen to equity markets if the SPX stays under 1629. Bulls will have no worries if they can send price back above 1629 and keep it above.