S&P 500 near key support/resistance levels

December 22, 2011 06:00 PM

SPX is nearing its 2010 settlement of 1257.64. The 200-day moving average is 1259.50 and there is a trend line at 1260.35. If SPX does climb above this key resistance area look for the next major level in March contract (SPH) at 1282.50. SPH is positive early above 1251.00 this morning. A break below this level would likely test the 1239 area. NDH is holding above its short term 61.8% retracement of 1263.50, but below the settlement of 2275.50. Look for momentum through either side of these levels today. Russell 2000 is again testing a short term trend line resistance now at 757.80 which has held several times. A break out above this level would re-test the 61.8 of the year at 767/768 which was the October high. DJI has its 78.6% retrace of the year up at 12,347. Eurostoxx needs a settle above its 50-day moving average, which has been short term pivot (2280). DAX has a short term trend line resistance at 6037. The asset allocation chart has TY/SP and 30YR/SP nearing its very pivotal 200-day moving averages. A clean close below these would turn them negative for treasuries vs. stocks. (have not been below the 200-day since end of July). The U.S. dollar Index has a short term trend line support at 79.347 which we will key for potential turn in momentum. ECH has trend line at 1.3178.

SPH has gained as it held key support at the 38.2% retracement and climbed back above its 50-day. We can still look for the 78.6% retracement level from the July top to be considered major resistance. DJ Transports settled above its 200-day yesterday. TYH and USH are holding above pivot supports for now, but continue to revisit. USH has a short-term trend line at 142-24 using the rolling contract chart which may prove to be key if broken. A settle back below the closing pivot of 142-31 turns them slightly negative. TYH continues to hold above its closing trend line support now at 130-075*. TYH has a short term trend line at 130-00 that if broken would likely break to test the weekly support at 129-09.5*. 5/30 curve is holding the initial pivot support of 205bps and seems likely to steepen from here. Bund has a key short-term trend line at 137.10. Crude Oil remains positive, but would likely lose steam if equities fail at key resistances today. RBOB has a key weekly trend line resistance at $2.70 which we will now key for upside potential after holding the major support again this week. Feb Brent has a major closing trend line resistance at $110.68. Look for a pause in WTI at $100.50. Natural gas is negative below $3.201.

David Wienke runs Triquetra Resources Ltd. in Riverside, Ill. (www.triquetraresources.com).

About the Author

David Wienke runs Triquetra Resources Ltd. in Riverside, Ill. (www.triquetraresources.com).