SPX S/R 7-8-11

The market bears tried to stop this recent momo up move at SPX 1341, and succeeded for a couple days, but yesterday the flood gates opened to the upside again as the bulls punched up thru this resistance ceiling.  Next came 1344, 1347, 1349 and even 1354 could not hold back the strong bull driving upwards.

The HOD yesterday was 1356.48, thus, 1357 resistance held, for now. The 1360 gap that was left behind at the early May top is now within a few points of filling.  The 1368-1370 area is very strong resistance, going back towards the 2008 top, thus, if the SPX punches up thru this area, 1400 is probably on tap.  The market bears should think of the 1368-1370 range as their last stand.  Keystone's 80-20 rule also says that if a close occurs at 1380+, then 1420 is on tap. But no use in getting ahead of the game, at this juncture, this outcome actually is not expected.

The behavior if/when the 1360 gap fill occurs is critical.  For today, the bulls need to touch the 1357 handle, if so, it's off to the races again for more upside, the 1360 gap will be filled in short order, then 1365 resistance is in play next.

The bears are in disarray.  Traders are trying to short this momo train but they are getting their face ripped off so they cover; this creates the quick short-covering moves that then suck in other traders to push the upside. Rinse and repeat day after day, but, this cannot go on forever.  Market bears need to get down to 1340 and make that handle disappear today.  If the bears get under 1340, an accelerated move lower will occur, but, barring that, the bears got nothing.

·        1565 (10/9/07 top)

·        1525

·        1500

·        1440

·        1427 (5/19/08)

·        1424

·        1419

·        1415

·        1413

·        1409

·        1407

·        1404

·        1399

·        1391

·        1389

·        1386

·        1370

·        1368

·        1365

·        1360

·        1357

·        1354

·        1349

·        1347

·        1344

·        1341

·        1337

·        1333

·        1331

·        1329

·        1326

·        1323

·        1321

·        1319

·        1316

·        1314

·        1312

·        1307

·        1300

·        1298

·        1295

·        1292

·        1289

·        1287

·        1286

·        1282

·        1278

·        1272-1273 (LT S/R)

·        1270

·        1268

·        1262

·        1258-1259 (1257.64 is the starting number for 2011)

·        1257 (3/16/11)

·        1252 (9/14/08 pre-LEH bk)

·        1249 (LOD 3/16/11)

·        1247