Weekly Review of the SPX

I just played around with moving averages today and spotted some interesting concerning support and resistance levels of the SPX. From the graph above I simple set the chart to weekly prices with a 20 and 50 SMA. While I used a 200 EMA for the longer trend in order to have recent closing prices effect the 200 MA value. It is clear the 20 MA line was broken in January '10 where the index was unable to hold above 1140. As half of February has passed the 50 DMA line has also been broken. As of last Friday the SPX closed below the 50 DMA, which has now become a resistance level, around 1078. The next MA support would be around 990 which is the 200 MA line. That is a way for the index to go and anything is possible. Furthermore the MACD has begun a very noticeable decline relative to the start of this rally since March of '09.

With the 20 DMA still in slight decline and the 50 DMA flatting it seems the index is in neutral territory. In April of '09 a similar declining 20 DMA and flatting 50 DMA also occurred as shown in the graph above. On the sides of the bulls it seems the market is posed to replicate the April '09 movement just by comparing the 20 and 50 MAs. Can the bulls continue this rally that began in March of '09?