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SPX and AmEx: Key Levels to Watch


The market thus far remains above the key bearish levels.

MINYANVILLE ORIGINAL On Friday, QE3 hopes ran high and the market failed to reclaim any of the bears' key levels. Until the noted levels are reclaimed, higher prices still remain possible. The first key level for bears to reclaim is 1391, and the first key level for bulls is 1416. S&P 500 (SPX) chart below:

Click to enlarge

The 5-minute SPX chart notes some near-term support and resistance, and the potential of a head and shoulders pattern. The tail end of Friday's rally could be a small ending diagonal, with one final wave up to around 1414 still to come -- but as noted, sustained trade above 1416 would increase the bulls' prospects for a retest of the 1426 print high.

The decline is thus far ambiguous.

Click to enlarge

The final chart is American Express (AXP), which is a stock I just added to my watch list. AmEx appears to be in the late stages of a triangle consolidation, and should offer prospects for a decent trade upon clean breakout or breakdown from the triangle.

Click to enlarge

In conclusion, there's been no material change in the intermediate outlook: barring QE3, it's expected that an intermediate top is complete or in process. Over the near term, the key levels outlined should help provide hints to the market's next move. Trade safe.

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No positions in stocks mentioned.
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