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Key Market Technical Levels to Watch Ahead of the Fed

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After hitting a record high of 1687 a month ago, the once-hot S&P 500 (^GSPC) has suddenly turned cold. Not ice cold or bear market cold, but rather what Jonathan Krinsky, chief technical market analyst at Miller Tabak & Co. might call "corrective phase" cold.

"May 22nd (was a) key reversal day when we made those all-time new highs then traded lower on the day," Krinksy says in the attached video, highlighting the market's recent pattern of setting lower highs. "To have a little bit of chop after such a significant (13-year) breakout should not be unexpected and I think that's really what we're seeing going on here right now."

Also keeping him on edge, he says, is the fact that we currently have "a declining 20-day moving average, which shows that short-term momentum is still moving lower."

That said, his caution is far from panic mode as he also take comfort from the continued support and uptrend that the 50-day moving average offers.

Officially, Krinsky's most recent note to clients shows support for the S&P 500 index at 1598, (which suggest about 3% downside risk from current levels), and resistance at 1675-87 (which implies about 1.5-2.5% upside.) It's also why, as much as we continue to see price volatility and wide daily swings, he says that we are still undergoing a corrective phase and that investors must respect the market's price action, at least until the technical trend turns bullish and we start seeing higher lows and ultimately higher highs.

"That's the tug of war game we're playing right here," he says, "but I think the Fed could potentially break us out of that range."

***Programming Note: Wednesday June 19th, be sure to catch our live multi-platform coverage of the Federal Reserve's biggest policy meeting this year, right here on Breakout!

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2:30pm: Analysis begins with a live stream Fed chief Ben Bernanke's press conference, with live blogging from Yahoo! Finance's team of Jeff Macke, Matt Nesto, Aaron Task, Michael Santoli, Lauren Lyster, Rick Newman and more.

3:15pm: The show goes on-air live with full analysis of the FOMC statement, Bernanke presser, and all of the day's market action. Special guests include Peter Schiff of Euro Pacific Capital, James Paulsen of Wells Capital Management, and Jeff Kilburg of KKM Financial.

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