SPX Support, Resistance (S/R) and Moving Averages for Trading the Week of 3/25/13

SPX support, resistance, moving averages and other levels of import are provided below. The Cyprus situation is heading towards a resolution; the futures spiked higher on the news that the capital controls for banks are approved.   For Monday, the bulls only need one point higher to touch the 1558 handle and the bulls will be running strongly higher. At this juncture, that appears to be the path.  An immediate jump to the 1562-1564 resistance will occur and then if that gives way the all-time closing high at 1565.15 will surely be taken out. Overnight Sunday will determine if the Cyprus path forward calms markets, or not. The Cyprus banks reopen on Tuesday morning and there will be bank runs, so even with new broad market highs on Monday, the drama will need to play out for several days to note the true effects.

There are several seasonality factors helping bulls this week. The last week of March is typically up about 80% of the time.  Window dressing occurs at quarter end, where funds want to show that they own the winning stocks for the quarterly statements, so they rush in during the last few days to buy the winners. Conversely, losers are thrown overboard to remove them from the quarterly statements but the bulls typically win this window dressing fight. The full moon is Wednesday and markets are typically buoyant through the full moon. The U.S. markets are closed on Good Friday so the new week is a holiday-shortened four day trading week. Therefore, the bulls smile again, since markets are typically bullish the day or two in front of a three-day holiday weekend (see Keystone's Pre-Holiday Indicator on the Other Signals page). That is quite a bull arsenal, why the bears may as well just stay home all next week and color Easter eggs instead. Add Chairman Bernanke's money bazooka to the mix and it appears hopeless for bears. Markets always appear extreme at inflection points.

In the bear camp, a stumble by Cyprus over the weekend will change the market complexion quickly. Likewise, Italy continues to struggle to form a coalition government and this week should tell the tale, if a government cannot be formed, a new vote will take place in May or June. The broad indexes will sell off under this scenario since two months of uncertainty will exist for Italy as its debt hits new record highs day after day. When a month is typically up strongly, such as this March, the remaining days tend to be bearish, so perhaps the bears are allowed one feather for their caps. The bears need to retrace Friday's move to the downside and push under 1546 which will accelerate the downside. A move through 1547-1556 is sideways action to begin the week.

The 20-day MA at 1539.23 and the previous week's low at 1538.57 form a confluence at 1539 and will act as a magnet this week. If 1539 fails, price will test the 200 EMA at 1534, if that fails, a test of the 50-day MA at 1516.46 is next. The SPX needs to move lower to test the 20 and 50-day MA's, if not this week, then surely in early April. The EOM (end of month) and EOQ1 (end of first quarter Jan-Feb-Mar) occurs on Thursday 3/28/13 since markets are closed Friday and Sunday is month-end. April begins with April Fool's Day, on Monday, 4/1/13.

·         1576 (10/11/07 All-Time Intraday High: 1576.09)

·         1565 (10/9/07 All-Time Closing High: 1565.15)

·         1564 (3/15/13 Intraday HOD for 2013: 1563.62)

·         1563 (3/14/13 Closing High for 2013: 1563.23)

·         1562 (Previous Week’s High: 1561.56)

·         1561

·         1557.74 Friday HOD

·         1557

·         1556.89 Friday Close – Monday Starts Here

·         1556

·         1554.90 (10-day MA)

·         1553 (10/31/07 Top: 1552.76) (3/24/00 Top: 1552.87)

·         1551

·         1548

·         1546

·         1545.90 Friday LOD

·         1543

·         1539.23 (20-day MA)

·         1539 (Previous Week’s Low:  1538.57)

·         1533.96 (200 EMA on 60-Minute Chart a Keystone Turn Signal)

·         1531

·         1528 (3/24/00 Closing Top: 1527.46)

·         1525

·         1524 (12/11/07 Top: 1523.57)

·         1521

·         1520

·         1518

·         1516.46 (50-day MA)

·         1516

·         1514

·         1512

·         1509

·         1505

·         1503

·         1500

·         1498 (12/26/07 Top: 1498.85)

·         1495

·         1489

·         1485

·         1481

·         1476

·         1475 (9/14/12 Intraday HOD for 2012: 1474.51)

·         1472

·         1470.51 (20-week MA)

·         1468

·         1466 (9/14/12 Closing High for 2012: 1465.77)

·         1465.59 (100-day MA)

·         1465

·         1461

·         1460

·         1457

·         1456

·         1455.16 (150-day MA; the Slope is a Keystone Cyclical Signal)

·         1453

·         1447

·         1446

·         1444

·         1441.29 (10-month MA)

·         1441

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

·         1438 (9/13/12 Fed Announces QE3 Infinity)

·         1435

·         1433

·         1431

·         1430.06 (200-day MA)

·         1430 (12/12/12 Fed Announces QE4 Infinity and Beyond)

·         1429 (11/6/12 President Obama Election Top)

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

·         1426.77 (12-month MA; a Keystone Cyclical Signal) (the cliff)

·         1424

·         1422

·         1419.76 (50-week MA)

·         1419

·         1416

·         1414

·         1413

·         1409

·         1406 (5/29/08 HOD: 1406.32)

·         1404

·         1403 (9/6/12 ECB Announces OMT Bond-Buying Program)

·         1402

·         1399

·         1397

·         1394

·         1391

·         1388

·         1385