S&P500 Levels to Watch

Today let's look at a daily chart of the S&P500 for levels to watch out for. As we've mentioned in our weekly videos, this 1598 level had been big time resistance since April. We obviously ripped right through that last week and this former resistance should become support on any future retests.

Now, as we can see in the daily bar chart below, the S&P500 has been trading within this uptrending channel for the better part of six months. You'll notice that the one crack in the uptrend line April 18-19 came down to that key support level around 1537-1538. This level also represents support where the buyers showed up in March and then again in early April. So this will continue to be a huge level that we'll watch for in the future:

As we have also mentioned in our videos, going into last week we wanted to see 1575 hold in order for us to feel a lot more comfortable with our longs, and also initiating new longs. This price represents former resistance levels throughout April and also the 61.8% Fibonacci retracement from the mid-April correction.

As far as price projections go, it looks as though 1635 is a potential first target. As you can see in the chart above, this is the 161.8% Fibonacci Extension from that same mid-April correction.

These levels are big. We want to definitely see last Friday's breakout hold. A false move here could prove costly, as bearish momentum divergences are still evident. But as long as we're above 1600, there really isn't anything for the bears to talk about. At least not yet.

Tags: $SPY $SPX $ES_F