S&P 500 Update for the Week Ending July 2, 2009

The S&P 500 was repelled at the “declining” 40-Week EMA and is now right on support (896), which is the rising 15-Week EMA. See the following chart. [In order to give a valid “buy signal,” the 15-week EMA must be rising when it penetrates the 40-Week EMA, which also must be rising.] Also, the relative strength chart (RSI) has now turned down from slightly above 50 to slightly below it. In bull markets, RSI remains consistently above 50, and in bear markets, RSI remains consistently below 50. See the following chart.

Therefore, the critical price is 896. A weekly close below this level would probably foreshadow a decline to 800-850.Note: To enlarge the chart, double-click inside of it.