New Support Levels for the S&P500 are Holding

I show two support Levels for the S&P500 on the graph below.

Click chart courtesy of stockcharts.com for full size image

#1 200-day-moving-average MA(200) was solid resistance not penetrated since May 2008. Now it is support that has been tested several times from above before the last rally.

#2 The dashed green line on the chart is the neckline of an inverted head and shoulders bottom pattern. One shoulder is "somewhat hidden" as only some components of the S&P500 were weak while others were quite strong. The pattern broke out in May and has successfully tested the neckline from above. All we need now is a rally with volume to feel very bullish.

If you have trouble seeing the inverted head and shoulder's bottom, perhaps this chart of FedEx (more FDX Charts) will make it easier.

• More info on Head & Shoulders Bottom
  
  
• more FDX Charts
  
  
• more S&P500 Charts
  

Disclaimer: I currently personally own and I cover FDX and SPY in "Kirk Lindstrom's Investment Letter" where I currently have both in my explore portfolio.

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As of July 16, 2009, "Kirk's Newsletter Explore Portfolio" is up 10.2% YTD vs. DJIA down 0.7% vs S&P500 up 5.7% YTD

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