SPX Support, Resistance (S/R) and Moving Average Price Levels for Trading the Week of 8/27/12

Last Tuesday, 8/21/12, is one of the most important trading days of the year thus far.  The SPX spiked upwards to take out the prior closing and intraday highs for 2012 at 1419 and 1422, respectively, but fell back under to close the day below.  Tuesday was an outside reversal day with a higher high than Monday, then lower low than Monday, and also a lower close than Monday's close. This type of behavior hints at a trend change for markets, and sure enough, the SPX dropped from a 1427 high this week to a 1398 low, 29-points, a 2% drop, in about 18 trading hours.

The 1427 resistance level takes on strong significance moving forward, especially 1426.60-ish. Interestingly, the April closing high remains in place and although the SPX has spiked up thru 1419.04 intraday but price remains unable to close above. A closing print any day forward over 1419.04 is very telling, very bullish and likely indicates a move to test 1427 again and perhaps the 1440's. Market bears must prevent 1419 with all their might.

The 1413, 1406 and 1403 resistance and support levels carry clout. Weigh their importance heavier than other levels. For the SPX for Monday, starting at 1411, the bulls only need two points higher, to print 1413.50, and hold it a few minutes, and an upside acceleration will occur to test the critical 1419 level. The bears must push the SPX under 1398 which will accelerate a downside move to 1391 in quick order. Failure of 1391 signals major market trouble and turmoil and far stronger selling ahead. A move thru 1399-1412 is sideways action to begin the new week of trading.

The SPX is respecting the 20-day MA at 1400.38 as support and the 10-day MA at 1410.52 as resistance (the Friday close is a hair above at 1411), so watch these two moving averages closely during Monday's trade. Any continued move above the 10-day is bull-friendly, any move below the 20-day is bear-friendy, between is neutral with the bull-bear tug-o-war raging on into the Bernanke and Draghi Jackson Hole circus beginning this coming Friday, 8/31/12.

·        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) (8/21/12 Intraday HOD for 2012: 1426.68)

·        1424

·        1422

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

·        1417

·        1415 (5/1/12 Top 1415.32)

·        1413.46 Friday HOD

·        1413

·        1411.13 Friday Close – Monday Starts Here

·        1410.52 (10-day MA)

·        1410

·        1406 (5/29/08 HOD)

·        1403

·        1400.38 (20-day MA)

·        1399

·        1398.04 Friday LOD

·        1394

·        1391

·        1390.80 (200 EMA on 60-Minute Chart)

·        1389

·        1385

·        1378

·        1377

·        1375

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

·        1370.34 (50-day MA)

·        1370

·        1369

·        1366

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

·        1363

·        1362.28 (150-Day MA; the Slope is a Keystone Cyclical Signal)

·        1362

·        1360.88 (20-week MA)

·        1359.96 (100-day MA)

·        1358

·        1357

·        1355