SPX S/R Week of 2/13/12

Last Thursday, the SPX spiked above 1354 for a couple minutes but was beaten back down. Therefore, the 1354 is an important resistance number overhead and the SPX will probably want to test it again at some point in the future. Price collapsed at Friday's open at 1351, which is also now a resistance level that holds street cred. On the underside, 1337 is strong support and it held on Friday.

For Monday's trading for the SPX, beginning the week at 1343, the market bulls will accelerate the broad indexes higher if price is pushed above 1351. If the market bears can push under 1337 to violate that critically strong support, the downside will immediately accelerate, large blocks sellers will enter the broad indexes in force and the markets will drop dramatically lower.  A move thru 1338-1350 is sideways action.

If the SPX loses the 1337 support, the 20-day MA will likely be tested.  This is near the strong 1326 support thus a failure at 1337 will likely lead to the low to mid 1320's. Keep an eye on Keystone's SPX:VIX ratio in real-time on Monday, starting the week at 64.58, as long as the ratio stays under 68, the SPX will drift lower and test the 1337 support.  If the ratio pops at the open, and moves back above 68, all bets are off for the market bears.  The bulls will spike the SPX vertical leaving short sellers bloody, so watch closely. Greece will set the tone overnight Sunday and likely determine Monday's direction as per the technical's described above.

·        1361

·        1360 (5/3/11 Gap)

·        1357

·        1354

·        Friday HOD 1351.21

·        1351

·        1349

·        1347

·        1345

·        1344

·        Friday Close 1342.64

·        1341

·        1339

·        1338

·        Friday LOD 1337.35

·        1337

·        1336

·        10-day MA 1335.59

·        1333

·        1332

·        1331

·        1330

·        1329

·        1327

·        1326

·        20-day MA 1323.40

·        1323

·        1322