S&P 500 Chart – July 10, 2009

I charted the S&P 500 (SPX) after the markets closed on July 10, 2009 when it closed for the week at 879.13.  I drew a thin line to show the closing price and how that same level has been a key resistance and support level a handful of times over the past six months.  The SPX dipped below that point two of the past four days, but managed to edge back up both times to stay above.  The other two days used it as support.  The could be a sign that this 880ish level is starting to crack or that we were close enough to holding support that we’re nearing a support level.

That’s how a lot of the indictors look to me lately.  We’re borderline support versus breaking on a few.  The 20 day simple moving average (sma) broke a few weeks ago and then acted as resistance.  The 200 day sma broke and the SPX keeps trading back and forth over it without being able to pick a true direction.  Friday closed close to dead on it.  The next level down could be the 100 day sma which acted as support a couple of times in April.  The 200 day sma also happens to be hovering near the 850 line and for some reason the round numbers like 800/850/900 mean something to some traders and make them worth watching more closely to all of us.  Those two together give the 850 line a little more power, especially since it would put the SPX down just over 10% at that point which could be enough for some investors to take their chances.  we might just luck out enough to see the 100 day sma come up to act as support right at the 10% down mark and that would be pretty strong support I expect.