$SPX Dissecting the chart of the SP500 Index
The S&P500 has bumped up against the downtrend resistance trendline (DTR) that has been in place since the highs back in February this year. Given the importance of this level, the bulls & bears will definitely have a major battle at this 3180-3185 level as the ability to clear this resistance could well set the S&P500 higher to try and close the gap at 3330. 3140 has been kept alive by the bulls this week but the bears will be licking their lips for a break of this level which could then see the index retreat back to its 200 dma at 3027. The level of 3000 is still clear support and unless that ever breaks down, the bulls will feel they are in safe territory. Also interesting to note is that the 50dma has crossed above the 200dma (also known as the "Golden Cross") which would indicate that the trend has turned up and this is something that the bull camp will be pretty content with. However history has shown that this golden cross doesn't always lead to that upside momentum in markets (rather a contrarian signal) and i would not get quite that excited about it for the time being. In any event, what we have is a major fight from both camps and i would only get excited should the bulls manage to break out above the DTR @ 3185. We could then argue that the upside gap @ 3300 is within reach. Alternatively a failure at the DTR and subsequent break below 3140 & rest assured that the bears will be running with excitement for a retest of the psychological 3000 level.Next week ought to be an interesting one. Good luck out there!
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