A Look At The SP500

After 2 weeks of trading in the new year, not much has changed from the end of 2009. The weekly SP500 continue to be bullish. The SP500 40 weeks SMA has crossed over the 80 weeks SMA, and it continue to hold onto the support provided by March 2009 trend line.

On the daily basis, the SP500 appears to be getting ready for a pullback. After it has hit the bull flag measured move level of 1150, it has dipped back to test the March 2009 trend line for support. The recent weakness developed by the financial and tech sector could cause the SP500 to break below the supporting trend line and cause it to move down to the 1115 or 1085 level. If the SP500 moves below the 1085, this short term pull back could turn into more than a pull back. I will be keeping a close eye on its behavior when it breaks below the 1115 support level to gauge the possibility of it moving down to the 1085 level.

Here is a weekly and daily chart for the SP500.





If it holds support and move above the resistance level of 1150, then 1200 could be the next target for the SP500. Next trading week will be a busy week for earnings report. The way the market reacts to some expected strong results from company such as GS and GOOG will give us a clue on where the next level of support/resistance for the SP500.