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S&P 500 Nears Possible Reversal

Technicals | Sep 19 2012

ncS&P 500 Near Possible Reversal Area While Crude Unwinds Momentarily

By Gary Kerdus

THE TAKEAWAY: The S&P 500 is trading near a potential reversal area of resistance while crude sold off heavily. The Dollar is firmly pressing against resistance and gold appears to be resting.

S&P 500 – Prices have rallied up to and stalled at what appears to be an ascending parallel trend channel line of resistance (red line) around the 1464.40 area. A push higher could find the next potential level of resistance around 1523.60 which was a high established on December 27, 2007. To the downside, the equity index may find support around the 1440.20 area (black line) which was once a past level of resistance and could now extend to become a potential floor of support. A push below the 1440.20 area may find additional possible support around 1426.40 where resistance formed (orange line) and turned into support on 9/10 – 9/11 which could further extend to become an additional sticking-point support area. The next level of possible support is marked around 1396.90 where the ascending parallel trend channel (grey line) projects.

CRUDE OIL – Price rallied up to potential resistance around the 101.05 area and was subsequently hammered down by the bears. The move lower pushed through projected support around 97.64 and stalled around 94.14 which was previously a floor of support marked by the lower red line. A beak lower may find support around 92.59 and 87.72, both of which were past resistance to act as potential future support areas and could serve as such again.

GOLD – Prices have traded aggressively bullish for quite some time and have recently move close to potential resistance around 1790.55/oz. Yesterday’s move lower may find a turning-point of support around 1741.84/oz where past resistance may serve as a future level of support (green line). Moreover, a push below 1741.84/oz may also find support around the 1716.15 area where past resistance acted as future support already and may do so again (orange line). The 1716.15 level in also inline to converge with the upward rising trendline marked in grey which could also become a floor to bounce from.

US DOLLAR – Prices fell to a floor of support around 9,738 (green line) where subsequently the greenback received bids up to potential resistance around the 9,816 area which was past support and may act as potential future ceiling of resistance. Moreover, the 9,816 area is also near the under-side of the descending trend channel line (grey line) which could further act as a turning point. A break higher may expose 9,893 where past support may act as a potential future ceiling of resistance. Alternatively, a strong move lower would have to push through 9,738 to find the next level of potential support around 9,672 which was a prior low where traders previously bid up the price.

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