S&P 500 futures...possible head and shoulders forming @ 1985.75

We're above all the moving averages and I can't recall being this far away from the 9 dma (1941.50) in quite some time.

Most bears probably covered after we closed above the 50 dma @ 1962.

I'm sure there are still a lot of shorts that are disappointed the world didn't end last week and that's why we always overshoot in the short term.

But if you're a trader and got long in the 1800's, I'd use this 1985 - 1990 level as a place to lighten up.

I'd even lay out some shorts @ 1985 (right shoulder) and take advantage of the greedy bulls that are calling for 2000.

The 50 dma @ 1962 and the 9 dma @ 1941 beckon.

S&P 500 futures...follow up

It didn't take long to get to the 150 dma @1926.80.

The old trendline that provided support should act as resistance here.  Making some sales.

S&P 500 futures...some perspective

Perfect bounces off those trend lines as SkyNet is firmly in control.

We closed right on the 200 dma @ 1901 last night before AAPL's earnings announcement...amazing how often technical and fundamental worlds collide.

Next stop looks like the 150 dma @ 1926.80, which coincides with a major trendline (support has become resistance).   

Trendline needs to hold

We're right on it this morning after testing and bouncing yesterday to close unched for the year.

Managing risk, I went back to the 2009 lows and connected the dots.

The new trend line coincides perfectly with the October, 2007 peak.

Not a prediction, and this move could take some time, but if the selling intensifies, I'd rather be prepared.

Also, bear markets are defined by a 20% move off the highs.

2000 * .8 = 1600...which is right on the new trend line.

S&P 500 futures at trendline support

Saturday's blog pointed out this trendline and at the time, I thought it was a stretch.  Now its coming to fruition.

Gotta buy em here on support.  Relief rally to the 200 dma @ 1900 makes sense.

S&P 500 futures nearing unched for the year

1846.25 is where we closed on 12/31/2013 and is a decent level of support on the chart.  Probably makes sense to cover shorts in here but wait to get long.

Sentiment has deteriorated enough for us to get a bounce back to the 200 dma @ 1900.

S&P 500 futures...another look

Recently, everyone has been breaking out their crayons to make trendlines.

But every trendline I've seen ignores, as an anomaly, the October 2011 and November 2012 moves.

The chart above shows a trend line drawn that includes those points....since we just broke below the 200 dma @ 1900 and things could get ugly.

S&P 500 futures...some perspective

200 dma = 1900.  Nice round number for all the programs to take us to on a Friday.

Resistance above @ the 150 dma and trend line:  1925.92

S&P 500 futures close right on 150 dma

I pointed out the 150 dma @ 1925 yesterday and we closed right on it.  Everyone's a technician when the market sells off and traders turn into market psychologists.

The easiest way to judge sentiment is to reference the charts.  Like a pilot flying blind in a storm, he relies on his instruments to guide him.  

During times of volatile, trendless tapes, the algos and the programs tend to play ping pong with the market in between these levels (9, 50, 100, 150, and 200 dma).

Earnings season starts tonight and will give us a clearer picture.

S&P 500 futures...some perspective

We failed this morning @ 1956, which happens to be both the 9 dma and the 100 dma.

Unless we can get above that 1956 level with a little volume and confidence, it looks like lower levels are in store.

1924.95 is the 150 dma and is sitting right on the long term trend line.

The 200 dma @ 1898 is begging for attention as well.

S&P 500 futures...some perspective

Perfect bounce off the trend line yesterday.  Now what?

A rally then roll over would hurt the most people, so that's what I'm leaning towards because the market is a nasty beast.

100 dma = 1954

9 dma = 1961

50 dma = 1969

These are all good levels to lighten up or even lay out shorts, in my opinion.

The 200 dma = 1897 and lurks below with a big bullseye on its head.

Moment of truth..S&P 500 futures right on trend line