Charter Flight

You said it can't work, it's a cold world
When you keep it all to yourself
I said you can't hide on the inside
All the pain you've ever felt
--Pat Benatar

This weekend, multitudes of technicians will be scouring charts for hints of what comes next after last week's soft action. Most will focus on daily charts to get a sense of where we're headed.

While that certainly has merit, elongating the time horizon might also suggest some possibilities into what the next few weeks/months might bring.

Below is a weekly chart of the SPX that includes the spring 2009 lows. We can see that last week's move lower finds the index cutting thru its 50 week moving average. The SPX closed at 1278, and the 50 wk MA is now above at 1283.

A range of support rests below. 1250 is about where the uptrend line off the 2009 line lows is currently positioned. Seems to me that a series of 'weak' support lines can be drawn at about 1250, 1200, and about 1135ish--the frame of reference for these primarily being last year's late summer/fall selling escapade.

A Fibonacci framework further emphasizes the importance of the 1135 level. It constitutes not only the closing lows during last year's sell-off, but also a near perfect 38% retracement of the range marked by the spring 2009 lows and the spring 2012 highs.

If we can't hold the 1250 zone over the next week or so, then I wonder if a date with that 1135 Fibo level may be in the cards this summer...

position in SPX