SnP 500 Surviving the supports

SNP 500

The SnP 500 just hade a successful retest of its crucial support at 1050-1040 and instead of breaking down a after a bearish flag formation it is now threatening to test the massive resistance at 1110.

Important points to watch out on the SnP 500 are.

1>A big overhead resistance at 1105-1110 which is likely stop loss for a lot of short position a break above this level will trigger these shorts and will set up the index for its 100 and 50 DMA at 11.5-1145.

2>there is this +ve divergence which has developed during the fall w which is being watched by the shorts and hence the covering up of short positions at critical support levels

3>GOLD is at Important resistance of 1255 and has been unable to break above it

4> DOLLAR INDEX is at its 2 years high and is poised at a huge resistance a fall below 87-86.60 is likely to lead to a rise in equity markets.

So a rise above 1110 will most likely lead to a advance up till 1135-1145 and this accompanied by a fall in $index will further strength the upward momentum. On the contrary if the index head down from the flag resistance of 1110 and fall below its crucial support of 1040 then it will certainly be in a bear grip.