SPX Support, Resistance and Moving Averages for Trading the Week of 8/20/12

The SPX was moving in a tight sideways range thru 1399-1406 last week until the thrust higher on Thursday. Now at higher levels, note the tight range on Friday of only four points. Friday's high was only 33 cents from the closing high for this year in April. Interestingly, the S&P 100 ($OEX) surpassed its April highs and now is matching the 2007 and 2008 highs when the broad market top was occurring. The bulls will throw confetti if they overtake 1419.04 and 1422.38.

Interestingly, during the April highs this year, the SPX came up to fill the gap at 1425.35 from 2008 but petered out before reaching this achievement. Here it is again. Will the SPX fail before 1419 prints? Or, will price fill the gap at 1425.35, and then fail? Or, will the SPX punch up thru 1419, 1422, and 1425 and head higher to match the 2007 and 2008 highs like the $OEX?

The 1406 and 1403 levels offer up very strong support and the 10-day MA is in this range so consider the 1403-1406 range as a gauntlet of support moving forward.  Since the SPX closed at the highs on Friday, the market bulls have the advantage and only need to see a smidge of green in the Sunday overnight futures and they will be accelerating up thru 1419, 1422 and higher come Monday morning.  The bears have to make a stand, now or never, and need to move the SPX under 1415 to accelerate a downside move.  A move thru 1416-1417 is sidways action and it is obvious that a two-point trading range will not occur. Thus, either the bullish case, or bearish case, will win on Monday and the stakes are high. The bulls can launch a long time rally if they break up thru 1419 and 1422, especially if copper (watch JJC 43.60) finally cooperates with the bulls. The bears would obtain a major victory if they can spank the SPX down from here and prevent 1419 from occurring. Monday will choose a victor.

·         1445 (1/4/08 Gap Fill 1444.01-1447.16)

·         1440 (5/19/08 Intraday HOD for 2008: 1440.24)

·         1427 (5/19/08 Closing High for 2008: 1426.63)

·         1425 (5/20/08 Gap Fill 1424.49-1426.63)

·         1424

·         1422 (4/2/12 Intraday HOD for 2012: 1422.38)

·         1419 (4/2/12 Closing High for 2012: 1419.04)

·         1418.71 Friday HOD

·         1418.16 Friday Close – Monday Starts Here

·         1417

·         1415 (5/1/12 Top 1415.32)

·         1414.67 Friday LOD

·         1413

·         1410

·         1406 (5/29/08 HOD)

·         1405.37 (10-day MA)

·         1403

·         1399

·         1394

·         1391

·         1389

·         1386.12 (20-day MA)

·         1385

·         1382.31 (200 EMA on 60-Minute Chart)

·         1378

·         1377

·         1375

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

·         1370

·         1369

·         1366

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

·         1363