SPX S/R Week of 1/9/12

The support and resistance levels show that 1282 held as overhead resistance on Friday. Price could not hold the 12-month MA, a critical level, placing a feather in the market bears cap. The Friday LOD at 1273.34 takes on epic importance when the Monday morning bell rings.  If the 1273 level gives way, four points lower than the starting number at 1277, it is highly likely that strong selling will enter the broad markets in force and the market bears will do some serious sustainable damage.

Conversely, if the market bulls come to play and start Monday with a move of four points higher to touch the 1282 handle, the upside will explode in a wild bull orgy with the broad indexes leaping higher. A move thru 1275-1280 is sideways action and the tightest sideways range in recent memory. This creates higher drama for Monday since a five point range will be hard to maintain.  Price will most likely have to choose either 1282 and higher, or 1273 and lower, and the move in that direction should be strong and significant. If price breaks lower, the 50-week MA is on a strong support level at 1267-1268. A loss of this level is very bearish.

The Merkozy (Germany's Merkel and France's Sarkozy) meeting is Monday with no economoic data or earnings. AA kicks off earnings season after the bell. Thus, the fate of the U.S. markets are in the hands of Merkozy as the new trading week begins.

·        1301

·        1300

·        1298

·        1296

·        1295

·        1293

·        1292

·        1289

·        1287

·        1286

·        1285

·        1282

·        Friday HOD 1281.84

·        12-month MA 1280.06 (One of Keystone’s Major Secular Signals)

·        1280

·        1278

·        Friday Close 1277.81

·        1277

·        1275

·        Friday LOD 1273.34

·        1272

·        10-month MA 1270.77

·        1270

·        1268

·        50-week MA 1267.49

·        1267

·        1265

·        1263

·        1262

·        1261

·        1260

·        200-day MA 1258.54

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

·        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)

·        20-day MA 1247.88

·        1247

·        1244

·        1242

·        50-day MA 1240.85

·        1240

·        1238

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

·        1233 (LOD 12/16/10)

·        1229