SPX S/R Week of 1/3/12

The support and resistance levels show the fight around the 1258 S/R, which is now both the starting year number for 2011 and for 2012, as well as the 200-day MA now at 1258.82.

For the novice traders, the MA, or moving averages, are simply smoothing lines that average the closing prices of a ticker or stock over time. The MA smooths out the upward and downward spikes for the price action. It is important when price crosses the MA's and when certain MA's cross each other. Therefore, MA's serve as important support and resistance levels.  Bring up the http://www.stockcharts.com site, type in your ticker or index of interest and bring up a daily chart.  In the 'Simple Moving Average' box make sure 200 is there, most charts will automatically display the 50 and 200-day MA's. This way you can monitor the moving averages in real-time since they obviously fluctuate as new prices are printed.

For the SPX as Tuesday's trading kicks off 2012, starting at the now-historical 1258 level, any sign of red futures overnight will lead to a market selloff to start the new year. The bears have the wind at their backs since the closing print was at the lows. A loss of the 1257 level at the open will usher in weakness down to test 1252, perhaps 1247.

The market bulls need to touch the 1264 handle, six points higher, to accelerate the upside. A move thru 1258-1263 is sideways action. Use semi's, retail and financials as a guide for market direction. The SOX is contributing to market weakness, RTH and XLF are currently contributing to market strength. Any change in the posture of these three sectors will impact the broad markets.

·         1289

·         1287

·         1286

·         1285

·         1282

·         12-month MA 1280.76 (One of Keystone’s Major Secular Signals)

·         1280

·         1278

·         1277

·         10-month MA 1275.57

·         1275

·         1272 (LT S/R)

·         1270

·         50-week MA 1267.60

·         1268

·         1267

·         1265

·         Friday HOD 1264.12

·         1263

·         1262

·         1261

·         1260

·         200-day MA 1258.82

·         1258 (1257.64 start of 2011; 1257.60 start of 2012)

·         Friday Close 1257.60

·         Friday LOD 1257.46

·         1257 (3/16/11)

·         1255

·         1253

·         1252 (9/14/08 pre-LEH bk)

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

·         1247

·         1244

·         20-day MA 1243.26

·         1242

·         1240

·         1238

·         50-day MA 1237.33

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

·         1233 (LOD 12/16/10)

·         1229

·         1227 (HOD 11/9/10)

·         1226

·         1225

·         1224 (12/7/10 large volume)

·         1220 (HOD 4/26/10)

·         1219

·         1216

·         1215

·         1210

·         1209 (HOD 4/29/10)

·         20-week MA 1207.46

·         1207 (4/29/10 Top)

·         1206

·         1204

·         1201