SPX S/R Week of 3/19/12

Note the tight range on Friday, only four measley points. The SPX gained 33 points last week. Seasonality factors forecasted a large up week with OpEx Monday expected to be up, it was, the move from Tuesday to Wednesday during OpEx is typicallly up, it was, the March FOMC meeting is up about 80% of the time, it was, and OpEx week in March each year is an up week about 80% of the time, it was. The charts and technical indicators continue to point to a market pull back but last week the seasonality factors won out.

Since Q1 draws to a close over the next two weeks, ten trading days, window dressing is anticipated for the last few days of the month which should be market bullish. On the esoteric side, a new moon occurs Thursday and markets are typically weak in front of the new moon.  Housing Starts are on Tuesday morning, one of Keystone's key monthly data points. TIF earnings on Tuesday and FDX and NKE earnings on Thursday will effect markets. Housing data hits this week with different reports as well as earnings, and, considering the importance of housing to any potential recovery, the housing sector will dictate market behavior.

For Monday, with the SPX starting at 1404, the tight Friday range places both the bulls and the bears in position to seize control as the new week begins.  If the SPX touches the 1406 handle, which is critical R from 2008, the bulls will yet again accelerate another broad market move higher. The market bears need to drop under 1401.50 to ignite strong accelerated negativity in the markets. A move thru 1402-1405 is sideways action but not expected; one side or the other will run after the Monday bell, bulls want to see a 1406 handle and bears want to see a 1401 handle. Should the bears come to play next week, watch the 10 and 20-day MA's as support levels in the 1371-1376 cluster zone. Broad markets will not suffer significant damage unless this cluster zone fails.

·        1424

·        1422

·        1419

·        1415

·        1413

·        1409

·        1407

·        1406 (5/29/08 HOD)

·        Friday HOD 1405.88

·        Friday Close 1404.17

·        1403

·        Friday LOD 1401.47

·        1399

·        1396

·        1394

·        1391

·        1389

·        1386

·        1378

·        10-day MA 1376.52

·        1372

·        20-day MA 1371.23

·        1371

·        1370 (5/2/11 Intraday HOD for 2011: 1370.58)

·        1368

·        1366

·        1364 (4/29/11 Closing High for 2011: 1363.61)

·        1363

·        1361

·        1358

·        1356