S&P Monthly and WeeklyS&P was trading around the February highs, which were seen as resistance.
Weakness was verified on Tuesday, with a break of the Weekly level @ 1329-31, helped by Tuesday's rejection pattern (daily 50% level) as part of a 2-day reversal set-up.
As noted in the daily report on Thursday...Over the past 6 months the dynamic Weekly lows has supported the market during the current trend since September 2010, and 1295 was that level in February.
What we now have is a short-term counter-trend move back towards the Weekly 50% level @ 1322.50.
Things begin to get interesting from next week, as there are two larger timeframe patterns playing out.
#1) the market remains in an orderly pattern after this week's low @ 1295 and the trend continues back towards the Weekly highs, and then towards the MARCH highs.
#2) Weekly support @ 1295 is simply a short-term counter trend move back to retest the breakout @ 1329.
If the market stalls @ 1329-31, and is once again trading below the Weekly 50% level, then traders need to keep an eye on the lower Weekly level @ 1304.
If the market begins trading below 1300-1304 , then i'll be looking for more weakness.
Keep in Mind that the S&P 500 is already trading around the 2011 highs.
Weakness :- can remain within an orderly trend, and move towards the lower Monthly 50% levels....
Or any negative news of unrest spreading in the middle east towards Saudi Arabia, could have the potential to see a swift move back down towards the trailing 3-month lows @ 1209, and 1st Quarterly support...
Which was a similar pattern that occured last year, when the April highs reversed down into trailing Quarterly support levels, but for very different reasons.
