SPX S/R Week of 4/23/12

The France Round One election results and HSBC Flash China PMI number occurs Sunday evening. Tentatively 8 PM EST for the France election results and 10:30 PM EST for the HSBC Flash PMI. If Sarkozy loses, this hints that a more socialistic government under Hollande will create even more trouble for the Eurozone as austerity programs may be reduced in favor of more spending and debt. The markets should react negatively but perhaps some of this anticipated election outcome leaked into the markets already on Friday.  The HSBC Flash PMI if bettern than expected should push equities markets higher but a weaker PMI should push commodities and markets lower.

For the SPX, the sideways triangle on the 30-minute chart identified 1377-1378 as a key level and along with Friday's LOD, the 10-day MA and support forms a strong confluence. If 1377-1378 fails that would provide street cred for the bears, if this support level holds, the bulls will have bragging rights moving forward. If the futures are only a couple points red overnight Sunday, and SPX 1377 fails after the open, the broad indexes should accelerate the downside and test 1370 in short order.

The bulls need to punch thru 1387-1388 to accelerate an upside move that would test the 20-day MA at 1392 and likely move higher towards 1399. A move thru 1377-1385 on Monday is sideways action. Price closed under the 50-day MA which is bearish. A Bradley turn date is Monday so stay alert for a market trend change to occur this week.  Considering that the markets are moving out sideways thru the triangle shown on the 30-minute chart, price should commit to a direction at any time. Below 1377-1378 is bear-friendly and above 1384-1385 is bull-friendly. The bulls and bears continue the fight in the middle and both will have to bring their A game this week.

·         1408

·         1406 (5/29/08 HOD)

·         1404

·         1403

·         1401

·         1399

·         1394

·         20-day MA 1392.06

·         1391

·         1389

·         1388

·         Friday HOD 1387.40

·         1385

·         1382

·         50-day MA 1379.50

·         Friday Close 1378.53 --- the week begins here

·         1378

·         Friday LOD 1376.96

·         10-day MA 1376.83

·         1375

·         1372

·         1371(5/2/11 Intraday HOD for 2011: 1370.58)

·         1370

·         1368

·         1366

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

·         1363

·         1361

·         1358

·         1356

·         1354

·         1351

·         1347