Last week did not end well for the bulls after the early week rally, it all fizzled away. I was focused on the 830 level last week to hold as support but it just could not. We closed the week a bit below that area. Going into this week I am bearish on the SPX as I believe we are now headed below the 800 mark and it could get ugly fast.
Looking at the chart, the SPX has some good support here in the 812-82o area but below that and we could selloff quickly. If we do get a bounce off current levels I would not be convinced of any rally until it got back over 850s at a minimum. It does look like that intermediate term trend is switching to the downside again.
This week should be interesting as a stimulus package will probably grab the headlines. Also we have the jobs report for Dec out this Friday and we all know how that will be. Plenty of news driven trading coming.
Economic data this week includes:
Monday- Personal Income & Spending, ISM Index, Construction Spending
Tuesday- Pending Home Sales, Auto and Truck Sales
Wednesday- ADP Employment, ISM Services
Thursday- Jobless Claims, Factory Orders, Productivity
Friday- Dec. Jobs Number, Consumer Credit
Monday the pivot point is at 829.25. I would be a seller of any retrace to the pivot on Monday. If we open up with strength I would not fall in love with it. I still think this market is in trouble and has to prove itself much more than it has lately if it is going higher. For now, I dont think it will.
There are a few short ambush setups possible right under the pivot around 827.50 and also a bit higher at 833.25. The shorts will sell into these zones so be aware and look for weakness IF we even get back up there. Trade safe.