What to Watch for on SPY and the S&P 500 Index

I’ve started doing regular weekly posts on my site  regarding key indicators and levels I watch each week on SPY and the S&P 500 Index.  Last week I highlighted some key fibonacci levels as well as the “death cross” (defined as the 50 day moving average crossing below the 200 day moving average with a video explanation available here).  SPY hovered around the 50 day moving average before falling sharply on Friday.  This was clearly not a good close to the week and could indicate further weakness is in store this week if earnings numbers fail to wow investors.

On the downside, watch $104.38 and if breached then $101.10.  Resistance could continue to be at the 50 day moving average as established last week.  In addition, I have drawn a downward sloping trendline which converged closely with the 50 day moving average last week before the market fell sharply. 

The key point is that the market has made lower lows and lower highs in the past 3 months which is not a positive for bulls. I’ll continue to monitor key support/resistance levels, long-term moving averages, and trend lines for keys on where SPY is headed.

No current SPY position

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Read more on SPDR S&P 500 ETF, S&P 500 (SPX) at Wikinvest