S&P 500 Chart – February 15, 2008

I’m taking the rare break to pat myself on the back today.  If you look at last weekend’s chart of the S&P 500 ($INX) you’ll see I drew the line that acted as a floor and a ceiling again this week and (out of shear luck maybe) the $INX closed at 1,349.99.  I predicted 1350 as the near term price last week.  That’s why I chart – it works.

The key points this week are:

• The short trend line of higher lows I charted last week held.
• The longer trend line of lower highs I charted last week held.
• 1350 is still the key point where both of these lines come together, but we’re already there and there isn’t much room for movement, so one of the trend lines will break this week.
• The 10 and 20 day moving averages are both almost dead on that 1350 line to emphasize the importance being created there.
• Williams %R finished the week right on 50 which means absolutely nothing for foreshadowing, but is just yet one more indicator that says we are at a crossroads.
• The $INX fell below those lines intraday on Friday, but closed above both by a hair.
• The 50 day moving average is still a ceiling if we break north.
• A retest of the low a couple of weeks ago around 1270 is the potential floor to the south.

This is going to be a fun week to see which direction we’re moving and I’m glad to be out of my February options for it to begin.  I’ll be ready to pull the trigger once I think we have a direction that can last.  Keep an eye on the VIX too.  It’s only at 25, so there’s not a lot of fear out there right now, which might slow some of my moves.  If it spikes above 30-35 I’ll be jumping in heavy again, especially if we have a trend line that can support that a bullish move.  The same holds for a while still that selling rallies will likely be a good move to make.