SPX S&P500 Monthly Chart; Ongoing Battle at 10-Mth MA (4427) and 12-Mth MA (4335) for Stock Market Control

The bulls rally stocks on Friday overtaking the critical 12-month MA at 4331-4339 then exploding higher on a short squeeze taking out the important 10-mth MA at 4427-4428. Now you see why these two levels are important. The SPX is parked at 4432 a hair above the 10-mth MA at 4427-4428 so obviously the bears need to take this support out from the get-go Monday morning.

As the previous post explained, a move up through the SPX 10-mth MA gives the upside rally some street cred, however, a firm joyous rally is not cast in concrete until the NYA overtakes 16700. If NYA 16700 occurs, the bulls can throw confetti and keep sloshing back the Fed wine; stocks will be exploding higher.

If the SPX holds above the 10-mth MA, and the rally continues, and NYA moves higher but stalls at or before 16700, that will be a major problem for the stock market. It is like flying along at 160 KMH (100 MPH) on the Autobahn and boom, a tire blows out. There is typically some screaming involved as the car will likely flip after a frantic skid. The Autobahn is a thrill but requires both hands on the wheel and alertness at all times. If NYA fails at 16700, the stock market will reverse, the SPX will come back down through the 10 and 12-mth MA's and a crash is likely. Choose your poison.

Bulls need higher copper to move stocks higher so this week it is likely the mantra; 'as copper goes, so goes the market'. Watch copper futures overnight.

Utilities may play a pivotal role in the week ahead. UTIL begins at 941 and must stay above 921 all week long to sustain the stock market rally, and be above 916 when the bell rings at 4 PM EST on Friday afternoon and the week ends (next week UTIL must remain above 916 all week long). Bulls can only rally markets if UTIL remains above 921. If UTIL 921 fails, you better run fast, because stocks will take a big leg lower. If UTIL 907 fails, it is lights out. Within a half hour, the SPX will likely drop 30 to 50 points and it will only get worse from there (a likely significant crash event). Thus, you can use the support/resistance numbers below to know exactly how strong or weak the stock market is and then use copper and utes as rudders to tell you where things are headed.

JOYUS RALLY ABOVE
NYA 40-wk MA 16695-16700
SPX 200-day MA 4435
SPX begins at 4432 and NYA at 16398
SPX 10-mth MA 4427-4428
SPX 50-wk MA  4356-4358
SPX 12-mth MA 4331-4339
SORROWFUL CRASH BELOW

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