SPX S/R Week of 12/19/11

The SPX closed at 1220 on Friday, 38 points below the opening print of 2011. Nine trading days are remaining in 2011 and the SPX is 38 points under the starting year print at 1258.  Santa is on a milk carton as markets languish, waiting for an S&P downgrade of France debt. Key support and resistance levels are 1268, 1258, 1235, 1220, 1209 and 1204. The 1224-1227 resistance cluster is an extremely strong ceiling.

For the SPX on Monday, the bears have an easier road to hoe since they only need to drop under 1215, about five points lower, and the large block sellers will enter in force accelerating the markets lower, the SPX will test 1209 in short order.  If the bulls, however, touch the 1231 handle, the upside will accelerate and the Santa Claus rally will be underway. A move thru 1216-1230 is sideways action.

The markets remain at the mercy of Europe, and more specifically, to begin the week, the possible downgrade of France debt by S&P. If S&P would have made an announcement concerning a France downgrade, the expectation was that it would have occurred last night, thus, perhaps the S&P will wait for January to act.  If Monday arrives with no S&P France downgrade announcement, the euro should pop along with U.S. equities markets. Of course, at any time this week, if the S&P downgrades France, the markets will tumble lower.

Critical Moving Averages (MA) to Watch:

• 12-month MA: 1277.59 (Keystone's Secular Signal; market bearish)
• 10-month MA: 1271.78
• 50-week MA: 1268.44
• 200-day MA: 1260.90
• 150-day MA: 1240.07 (Keystone's Secular Signal-the slope; market bearish)
• 50-day MA: 1228.77
• 20-day MA 1220.81
• Friday Close 1219.66
• 20-month MA: 1218.24
• 20-week MA: 1200.22
• 200-week MA: 1134.70 (Downward sloping MA; market bearish)

 SPX S/R:

·        1260

·        1258 (1257.64 is the starting number for 2011)

·        1257 (3/16/11)

·        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)

·        Friday HOD 1231.04

·        1229

·        1227 (HOD 11/9/10)

·        1226

·        1225

·        1224 (12/7/10 large volume)

·        1220 (HOD 4/26/10)

·        Friday Close 1219.66

·        1219

·        1216

·        Friday LOD 1215.20

·        1215

·        1210

·        1209 (HOD 4/29/10)

·        1207 (4/29/10 Top)

·        1206

·        1204

·        1201