SPX Support, Resistance (S/R) and Moving Average Price Levels for Trading the Week of 9/10/12

SPX support, resistance, moving average and other levels of interest are highlighted below.  The bulls took a switch to the bears late last week, whipping the furry naysayers badly. Many tried and true indicators verify the long and strong nature of the markets although the charts and other indicators, such as the complacency fear gauges, CPC and VIX, are signaling that a significant market top is now in place. Traders are fearless without any worry which is not condusive to upward moving markets. Typically, markets are built on a wall of worry but there is no worry now as evidenced by CPC and VIX, despite any faux hand-wringing by traders.

The SPX bounce late last week occurred on lower volume than the original pop received on 7/26/12 and 7/27/12 when Draghi originally announced that the bazooka is on its way. In addition, Friday's volume was lower than Thursday's, as price moved higher. "Don't fight the Fed," is the familiar refrain that has ringed true for decades of trading. Typically, Fed action came at times when the markets were severely beaten down, or ready to completely roll over, unlike now, where markets are actually very elevated. Perhaps Chairman Bernanke has a surprise planned for Thursday and considering that the universal consensus is that QE3 will be announced (Keystone is not in this camp and thinks at most the markets may receive a tiny bone such as extending low rates into 2015 instead of 2014), any missed expectations by the crack cocaine supplier will result in a strong selloff.  The Geman vote and Dutch elections will provide drama on Wednesday ahead of the Fed.

The SPX took out the 2008 closing high at 1427, a major accomplishment and bulls continue to pat each other on the back all weekend long telling each other how smart they are.  Price has not yet violated the 1440.24 high of the year for 2008, only a couple points away. This level is very significant since the closing high, on the very same day in 2008, was already taken out. If price overtakes 1440, the next target is a gap fill from 2008 at the 1446 resistance area.  The wild market upside orgy last week blew threw strong resistance levels so price needs to back test one or more of these levels; 1427, 1419, 1413, 1406.

For the SPX for Monday, starting the new trading week at 1438, the year's high print, closing exactly at the intraday high on Friday, the market bulls only need to see a smidge of green in the futures overnight Sunday. If so, the 1440 level will fold like a cheap suit and price will venture upwards to 1446. The booze will flow like water and the bulls will search for lampshades to don as they contininue an upside drunken celebration. The bears must keep the Sunday overnight futures red with all their might, otherwise, they are in for another long day to start the week.  If the bears can place the market in a negative mood, and push the SPX below 1431.50, a downside market acceleration will occur to back kiss the 1427 in short order. A move thru 1432-1437 is sideways action for Monday.  Do not become complacent like the majority of traders. Short positions should be maintained here forward to provide downside protection.

·         1505

·         1500

·         1499 (12/26/07)

·         1496 (gap fill)

·         1488

·         1485

·         1479

·         1476

·         1468

·         1464

·         1460

·         1457

·         1455

·         1453

·         1448

·         1446 (gap fill)

·         1444

·         1441

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

·         1438 (9/7/12 Closing and Intraday High for 2012: 1437.92)

·         1437.92 Friday HOD

·         1437.92 Friday Close – Monday Starts Here

·         1435

·         1431.45 Friday LOD

·         1431

·         1429

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

·         1424

·         1422

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

·         1413

·         1412.58 (10-day MA)

·         1411.29 (20-day MA)

·         1410

·         1406 (5/29/08 HOD)

·         1403

·         1401.53 (200 EMA on 60-Minute Chart a Keystone Turn Signal)

·         1399

·         1394

·         1391

·         1389

·         1385

·         1384.08 (50-day MA)

·         1378

·         1377

·         1375

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

·         1370

·         1369

·         1367.74 (150-Day MA; the Slope is a Keystone Cyclical Signal)

·         1366

·         1365.67 (20-week MA)

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

·         1363.84 (10-month MA)

·         1363

·         1362.86 (100-day MA)

·         1362

·         1358

·         1357

·         1355