S & P 500 – Chart Update

I have attached a 12 year monthly chart of the S&P 500 Index that,  from a technical perspective, shows a long-term resistance level that could stifle any current short-term rally attempts. Being a short term trader I rarely review charts that go back this far but believe this chart could be of significant value.

The blue solid line is the 160 month moving average which is presently situated just overhead Friday’s S&P 500 close at 1,136. This trendline proved a support level during the 2002-2003 lows, and when it was broken on the downside in October 2008, it signaled five months of painful selling and an almost 500 point drop . This long-term moving average is currently situated at 1,157.70, and last week’s S&P 500 high was 1,150.41. Coincidentally, the 1,150 area has historical significance as well, as it marked resistance for a six-month period just ahead of the final leg down in the 2000-2002 bear market.[see chart]  Additionally, the 1,150 area acted as resistance from February through October 2004, and as a major area of support in April 2005.

Currently, I  see support for the S&P 500 in the 1,100 to 1,120 area, and resistance in the ever close1,150 to 1,160 area.