December 21, 2010
Both the S&P 500 Index (SPX) and S&P SPDRs (NYSE: SPY) reached resistance and have now spent six trading days unable to push through it.
For the SPY the resistance is at 125.00 and for the SPX the level is at 1250.00. This band of resistance must be decisively surpassed in coming days or we will see another pullback.
If we do get the breakout, and these next two weeks are a traditionally bullish ones with holiday trading usually trending higher, we will be looking for higher highs in coming weeks.
After a breakout the SPY could easily reach 130.71, the August 11, 2008 bear market rally closing high. The SPX could reach 1305.32, the August 11, 2008 bear market closing high.
A failure to breakout would point to a correction to about SPX 1217 and SPY 123. These are the highs reached on November 5, 2010 and these levels should act as support.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy has a position in the S&P 500 SPDRs.