This Is The 'New' Most Important Number For The S&P 500

Tyler Durden's picture




 

Weakness in Breadth, volume, sentiment, and momentum all lead BofAML to warn "sell rallies" in stocks. Starting 2016 under pressure, the S&P 500 has big support at 1994-1990 but 1965 is the level at which things become perilous. Simply put, holding 1965 is required if a 'bounce' like late 2011 is expected.

S&P 500: 1990-1965 is the big support to start 2016

The S&P 500 starts off 2016 under pressure, with big support at 1994-1990 to 1965. As we outlined in our 2016 Year Ahead, 1965 is the 61.8% retracement of the late September-to-early November rally and holding this level is required to maintain that the S&P 500 is consolidating within a rising trend similar to 2011. The S&P 500 dropped but held a similar 61.8% retracement level in late 2011, before an upside breakout in early 2012. Today’s downside gap, at 2038-2044, offers initial resistance. First resistance remains 2076-2080, which held on a muted seasonal rally in late December, and is ahead of big resistance at the 2100-2135 range highs.

Holding 1965 is needed to keep pattern similar to late 2011

In late 2011, holding a key 61.8% retracement level kept a bullish consolidation pattern intact and preceded an upside breakout in early 2012. This means that holding the 61.8% retracement at 1965 is needed to keep the late 2015-to-early 2016 pattern similar to the bullish setup from late 2011/early 2012. A failure to do so would weaken the overall pattern for the S&P 500.

And Breadth & Volume remain lackluster to weak

Breadth: The S&P 500 advance-decline line has struggled since probing to new highs in November and December.

Volume: On-balance-volume (OBV) on the S&P 500 remains near year-long lows and points to distribution or selling, which is a negative sign.

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Tue, 01/05/2016 - 08:25 | 6998946 SoDamnMad
SoDamnMad's picture

What happens on Friday in China when the 6 month "sell ban" is lifted? Will China reinstitute the ban?  Looking at the charts the Chinese PPT is throwing at lot at the slumps (routs) and coming away empty handed. I don't see a noodle of support.

Tue, 01/05/2016 - 08:27 | 6998951 ThaBigPerm
ThaBigPerm's picture

S'ol good.  The ramping of futures has begun.

Tue, 01/05/2016 - 08:37 | 6998973 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

Jesus christ, WTF happened...??  Futures popped 0.5% in the last half hour. 

This shit is fucking criminal. 

Pitchforks at the Eccles building.  Time to audit the criminal fed and hang some fedsters in the process.

Tue, 01/05/2016 - 08:43 | 6998987 USisCorrupt
USisCorrupt's picture

I would not be to concerned, the GAME changed when John Kerry did an about face on Asaad on not demanding that he be taken out of office.

The US had a talking too as how the game foward will be.

If there is NOT a huge DUMP of MOAR Debt in the markets there will most likely be a controlled drop in the markets going forward. The days of the US calling the shots are not like they use to be, we will not have long to wait to see just how this PONZI continues one way or the other.

I say, FREE the Slaves.

Tue, 01/05/2016 - 09:08 | 6999082 Atlasshruggedme
Atlasshruggedme's picture

Freeing the Slaves will come soon.

It is important to note that a collapse of something so large will take a long time. This "Long Time" started years ago, so keep watching and be ready.

Over the next year, take time to make yourself better. Go out of your way to spend time with your family and learn who are your real friends. Because when this starts to get difficult, those who you thought were friends will not be friends.  

Tue, 01/05/2016 - 09:12 | 6999093 USisCorrupt
USisCorrupt's picture

I was shocked to read that Galt's Gulch in Peru ending up being a scam by the developer. I hear it is being worked out in the courts now but I feel for those who invested their life savings.

Tue, 01/05/2016 - 10:17 | 6999363 dizzyfingers
dizzyfingers's picture

Sad, maybe, but buyers beware applies to everyone.

Tue, 01/05/2016 - 09:16 | 6999104 pods
pods's picture

Are all these fancy charts assuming there is an actual market?

Might be a bit of a mistake.

pods

Tue, 01/05/2016 - 08:49 | 6999013 nscholten
nscholten's picture

Going on seven years, dude.

Tue, 01/05/2016 - 08:34 | 6998965 RadioFlyer
RadioFlyer's picture

Ok, sell ban lifted!  But you sell, you die.

 

Tue, 01/05/2016 - 08:26 | 6998948 Mick Shrimpton
Mick Shrimpton's picture

Does anyone here buy this support level bullshit?

Tue, 01/05/2016 - 08:37 | 6998974 Rainman
Rainman's picture

Bank of Lynch says the Shanghai comp will take a dump of 30% this year. The unwinding of massive amounts of leverage won't occur in just one exchange.

                    http://www.bloomberg.com/news/articles/2016-01-05/bank-of-america-merrill-lynch-the-shanghai-composite-will-plummet-by-nearly-30-in-2016

Tue, 01/05/2016 - 09:14 | 6999095 ShorTed
ShorTed's picture

It certainly looks like a lot of work and and time went into all these charts, too bad none of it really means anything in these manipulated mkts.

Sidelines are the only place for me as far as equities go.  Still getting long lead, Au and Ag.

Tue, 01/05/2016 - 08:32 | 6998961 NEOSERF
NEOSERF's picture

My guess is that the 2011 pattern might have had liftoff due to QE2 or the like which is absent here...

Tue, 01/05/2016 - 08:47 | 6999004 USisCorrupt
USisCorrupt's picture

Hello?

Reverse REPO's, it's MOAR like a Trillion a month IF you know where to LOOK!

Tue, 01/05/2016 - 09:13 | 6999085 LawsofPhysics
LawsofPhysics's picture

^^^this.

 

Correct, those in "the club" are still getting access to all the free money they want.

 

Eventually all those paper claims will in fact seek out real assets.

Tue, 01/05/2016 - 08:48 | 6999006 NotApplicable
NotApplicable's picture

Hidden, not absent. Question is, can the facade continue to hold yet another day?

Tue, 01/05/2016 - 08:38 | 6998977 BadKiTTy
BadKiTTy's picture

If defence of the critical level is needed, then that is what we are going to get.  Part of shaping mindsets towards a particular aim - ie that the FED will not let it collapse.   I reckon the market is due a massive correction, ergo it is going to go straight up. Makes sense given my 100% wrong market guesses so far (my only saving grace is that I am not 'in'). 

Tue, 01/05/2016 - 08:46 | 6998995 I AM SULLY
I AM SULLY's picture

So you envision the humans becoming a slave race, wearing burlap, eating bugs, but still trading stocks?

(with algos too)

 

Tue, 01/05/2016 - 09:10 | 6999086 DeadFred
DeadFred's picture

Don't be crazy, bugs will only go to the elite. Sheesh, he think they'll let us get some of the bugs!

Tue, 01/05/2016 - 09:13 | 6999096 LawsofPhysics
LawsofPhysics's picture

Don't be such a overdramatic douche. 

It will be just like the former Soviet Union, where "officially" everything was reported as "awesome".  The government just set all kinds of official prices...

The reality of course was something else entirely, if you could even find what you were looking to buy...

A few fuedal/fascist lords, and then everyone else...

...no surprise the system collapsed...

too bad America is so eager to try the same experiment.

Tue, 01/05/2016 - 10:20 | 6999387 dizzyfingers
dizzyfingers's picture

Prescient that last... I've always noticed that the gov always chooses the worst to emulate, not the best.

Tue, 01/05/2016 - 09:21 | 6999134 Peak Finance
Peak Finance's picture

Snowpiercer Roach Bars

Tue, 01/05/2016 - 08:47 | 6999001 Bernoulli
Bernoulli's picture

There still seem to be some that think in straight lines. Different year, different political situations, different hot spots, different buyers, different sellers, different fucking everything. How many things influence the S&P 500? One million things? 100 million things? Even more? But yep, let's just draw some lines on a chart and compare the 2011 2D "pattern" to now. Great idea.

Tue, 01/05/2016 - 09:27 | 6999101 LawsofPhysics
LawsofPhysics's picture

Since 1913 and even more so since 1971 there is plenty of evidence to support the proposal that The Fed is the only entity that really influences the S&P.  Not saying it will last, but the evidence is pretty damn obvious. Start with the balance sheet of the Fed and their primary dealer banks. Add in all the assets and wealth of all the people associated with the Fed and that pretty much covers it. But then again, if I could "create" as much money out of nothing with NO REAL WORK I suspect my balance sheet and list of assets would look pretty damn impressive too.

Tue, 01/05/2016 - 09:20 | 6999128 Kefeer
Kefeer's picture

At 3:30pm yesterday though 4pm there were $2-$3bn inflatable things pushing the market upward.  Levitation; the magical market force.

Tue, 01/05/2016 - 08:47 | 6999005 nscholten
nscholten's picture

 blah blah blah

Tue, 01/05/2016 - 08:55 | 6999034 bamawatson
bamawatson's picture

Au-contraire; halb halb halb

Tue, 01/05/2016 - 08:59 | 6999048 moonmac
moonmac's picture

Fake Wall Street Recovery during a very real Great Depression.

Tue, 01/05/2016 - 09:08 | 6999080 LawsofPhysics
LawsofPhysics's picture

LOL!!!  Techanical analysis in a centrally-planned "market".

 

Everthing is coming to equalibrium...

Baring a real world war the entire planet will look like South America soon enough.  Welcome to another fuedal age!

Tue, 01/05/2016 - 10:05 | 6999311 orangegeek
orangegeek's picture

Exactly.

 

But clearly everything is fine and all remains bullish.  LMFAO!!!

 

MOAR AWL THYME EYES!!!!!

 

FUCK YOU YELLEN YOU CUNT!!!

Tue, 01/05/2016 - 09:17 | 6999114 Kefeer
Kefeer's picture

"On-balance-volume (OBV) on the S&P 500 remains near year-long lows and points to distribution or selling, which is a negative sign." -END

 

More like a sign that the market is getting easier to keep inflated.  Eventually the beast has only itself to devour.

Tue, 01/05/2016 - 10:20 | 6999385 ZangotheMagnificent1
ZangotheMagnificent1's picture

Very weak bounce at the open ... don't buy.

Tue, 01/05/2016 - 10:20 | 6999386 ZangotheMagnificent1
ZangotheMagnificent1's picture

Very weak bounce at the open ... don't buy.

Thu, 01/07/2016 - 11:52 | 7011444 milo_hoffman
milo_hoffman's picture

ALMOST broke through....today could be the day.

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