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MrTopStep Best of 2012: SPX Holds Above 1413 Level


Don Soubolsky / level3data.com

The 1413.25 was tested and retested 5 times yesterday but in the end the bulls won and the SPX closed above the important 1413 level.

The SPX is at the top of a trading range between 1413 and 1383. This descending line’s origin is the 10/05 high of 1470 but there are early signs the SPX may be reversing to the upside. Ledges are slippery and stocks have been dropped from this 1413 ledge many times since 10/05.

The descending line at 1413 is now acting as support. As long as 1413 holds dips are to be bought with a target of 1433.

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

RECAP: Yesterday November 29th: “SPX on Ledge”

“Ledge tested 5 times:” The 1413 ledge was tested 5 times but only broke once. The SPX opened at the 1413 ledge then rallied, bounced, failed, punched, tested and the final retest came 30 minutes before the close.

Of most significance the SPX closed at 1416 which is higher than the steep 1413 ledge or as some would say “fiscal ledge.”

“Levels Recap:”
The 1413.25 support and resistance level proved to be a very important trading level. The high of the day was 1419.76 (our bolded support was 1419.35).The low of the day was 1409.09 between our first two non-bolded support levels. See the 11/29/12 post for past levels.

Key resistance level for SPX: S&P 500 index today November 30th – 1419.64, 1423.52

Key support level for SPX: S&P 500 index today November 30th – 1409.44, 1403.08

UP 1418.44 1419.64 1421.12 1423.52
DOWN 1413.25 1409.44 1407.10 1405.50 1403.08 1396

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. It appears the 0-line of $140.30 is safe for now. As long as this 0-line holds the new target for the SPY is $144.02. There are early signs of Buying Pressure Exhaustion as shown by the black artifact above the Buying Pressure Line on the chart for the past 3 days. This is NOT a Sell Signal. The current rank is -0.55. Dips are to be bought as long as the $140.30 holds. A neutral rank on the SPY means higher volatility.

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 $140.30. Unless the fiscal cliff issue is resolved the $140.30 support will most likely break down to retest $134.70 low.

SPY 1 Day Data

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 $124.68 and is now acting as support. The closing price yesterday was $125.13.

THE MOST LIKELY TRADING SCENARIO for TLT is to bounce around the 0-line and trade higher to print a new high in the $127.79 range. The TLT is a mirror image of the SPY.
Level 3 Data Quant Report Exhaustion Indicator is neutral on the TLT.

TLT 1 Day