MrTopStep Best of 2012: SPX On the Ledge at 1413

11-29-12 Level3Data Chart 1

Don Soubolsky /


The SPX is at the top of a trading range between 1383 and 1413.  A descending line at 1413 is acting as resistance.  Several times in the past the 1413 ledge is where bulls gave up and the bears took the SPX down.

If the 1413 level can be punched and held then 1433 here we come. BULLISH VIEW will be in play.

Gaps are filled in the SPX.  Previously I posted that SPX gaps have a high likelihood of being filled. The 1390 gap was filled Wednesday and the next gap of 1362 to 1372 could be filled if the 1383 gives way.

 LEVEL 3 DATA EXHAUSTION LEVELS:   NEUTRAL on stocks (SPY) and bonds (TLT).  Last week the SPX gained 66 points off the 1343.34 low.  Higher volatility accompanies neutral exhaustion levels.

18 trades were exited last week with an average gain of +0.91%.  The neutral exhaustion levels put us in the middle of two views on the SPX.

BEARISH VIEW: Top of the 1413 range with a downward trend to retest 1343.

BULLISH VIEW:  Upward trend to punch and hold 1413 then retest 1433.

We are sellers at the 1413 level and buyers of dips at the 1383 to 1393 levels.

RECAP:   Wednesday November 28th: “20 Point Range”

“SPX 20 Point Range” was the headline that appeared here yesterday. I did not expect the SPX to trade the entire range in one day but the SPX traded a 23 point range between 1383 and 1410.

  “Levels Recap” Our bolded support levels were KEY for trading once again. The low of the day was 1385.76 (our bolded level was 1386.50). The high of the day was 1410.29 (our non bolded level was 1409). The 1404.33 bolded level acted as important resistance. After being tested and retested the 1404.33 finally gave way in the past 30 minutes of trading. The SPX closed at 1409.

See the 11/28 post for past levels.

LEVELS:   Today November 29th: SPX S&P 500 Index:

Key resistance level for SPX:  S&P 500 index today November 29th – 1419.36, 1323.21

Key support level for SPX: S&P 500 index today November 29th – 1407.01, 1403.19, 1397.03

UP 1413.25 1419.36 1430.83 1423.21 1429.45 1433
DOWN 1413.25 1407.01 1403.19 1397.03 1387.04  

SPY – S&P 500 ETF:    Level 3 Data Quant Report signal is NEUTRAL: 11/08 Buy Signal was exited Friday with a 1.26% gain.  To sustain this rally the bulls need to defend the 0-line of $139.81 which is now acting as support.  The short-term trading range has now been expanded and is now $139.00 to $141.54.  The $141.54 represents a series of lower highs and if the bulls cannot push the SPY higher we could quickly see the $139.00 break to the downside.

Level 3 Data Quant Report is neutral on the SPY. 

THE MOST LIKELY TRADING SCENARIO is that we have seen the highs of the year of $148.11. The series of lower highs and lower lows will most likely continue.  We rebounded off the $134.70 bottom to safely close above the 0-line of $139.81. Unless the fiscal cliff issue is resolved the $139.81 support will most likely break down to retest $134.70 low.


SPY 1 Day Data

SPY 1 Day Data Level3Data

TLT – Long Term Bonds: Level 3 Data Quant Report signal is NEUTRAL: 11/08 Sell Signal was exited last Thursday with a 1.12% gain. The TLT is trading in and around the 0-line of $124.51 and is now acting as support. The closing price Monday was $124.90.

THE MOST LIKELY TRADING SCENARIO for TLT is to bounce around the 0-line and trade higher to print a new high in the $128 range. The TLT is a mirror image of the SPY.

TLT 1 Day Data

TLT 1 Day Data Level3Data

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