S&P 500 Chart – June 19, 2009

I drew this year to date (YTD) of the S&P 500 (SPX.X) chart after Friday’s close when it was finished the week at $921.23.  I might have gotten a little line crazy on it and hope you can still see where I’m going with my following points.  I drew two trend lines of higher lows that started in February and March.  The shorter one broke support this week, but the longer one offered a new spot of support.  The upper trend line of higher highs seems a long way away right now, but was worth drawing for perspective. 

I think the most interesting line is the horizontal line that starts with the 2008 closing price of 903.25.  It’s interesting because we saw support come from that line when the SPX saw an intraday low of 903.78 this week.  That was just a hair above the 50 day moving average to make the bounce all that more believable that it could hold for longer.  The horizontal line below that is the next point of potential support if this first one breaks.  It’s sitting around 877/878 and marks previous support and resistance points over the past six months.

I circled a few sections in my coloring party.  The red circles highlight the break of Williams %R twice which marked start of the next few days’ downward movement.  The green circles show when the 14 day indicator touch oversold before regaining momentum for a few days.  Now that we’re a few days past that the %R indicators are more neutral, but worth watching to see if momentum starts pushing or pulling in either direction.

Hidden somewhat in the jumble of lines are the 10 and 20 day moving averages. They almost came to touch each other on Friday and if next week starts off below Friday’s close we could see a bearish crossover as the 10 day moves below the 20 day moving average.  If we get a few positive days it could lead to even more positive days to follow.  In other words, I think these next two days could point to how the next full week or two could move.  Going down much pulls the 10 day below the 20 day and breaks the line of support I talked about in the second paragraph and might pull the Williams %R even lower.  If those lines break, so does the 50 day moving average.  As the past few weeks have been, we’re in for another interesting and telling week.  I feel like we’re starting the last season of Lost where we might finally get the answers we’ve been waiting on.  Stay tuned, this is worth watching!

Happy Father’s Day to all dads out there.  I’m on the way to the pool with my son now.