SPX Daily Chart 200-Day MA Teasing Two-Year Failure

The 10-month MA at 1910 failed yesterday. Next week the 200-day MA at 1905 and 12-month MA at 1895-1896 are in play. This support gauntlet at 1895-1910 determines the fate of the stock market for the months and perhaps couple years ahead. Next week will be an epic battle. Bulls must move the SPX above 1910 pronto or they will fall down the rabbit hole. If the 1895 is lost, the stock market may crash a la an August 2011 waterfall crash scenario.

The 200-day MA has not been touched in two years. There is an epic bounce or die decision that must be made come Monday. The Dow, Nasdaq and Russell 2000 indexes have lost their 200-day MA's. Bulls win above 1910. The bloody fight continues between 1895-1910. Under 1895 and markets may crash in quick order. The chart exhibits potential for a head and shoulders (H&S) pattern and would need a left shoulder going forward. The neckline at 1900-1910 is a logical place for price to bounce. A mean reversion is desperately needed for the stock market. The current cyclical rally from 2009 is the fourth longest in history. In the couple years ahead, as price pulls back under the 200-day MA to show it respect on the underside, the SPX price could easily stagger through 1600-1900. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.