The S&P 500 is at a crossroads as the price structure pierces above its resistance line off of the October 2007 high (1576.09), which cuts across the price axis at 1158.68. A sustained hurdle of the 3-year down trendline could (should) have significant near-term bullish implications for the SPX, and would in all likelihood be heading for a revisit of the April 2010 high at 1219.80 -- or another 5% beyond current prices.

Let's notice that a confluence of important intermediate-term moving averages have converged in the vicinity of 1110, with the shortest average of 13 weeks about to climb above the rising 52-week moving average. In the past, when such a set-up has developed -- when the SPX was finishing a corrective period after a prior strong advance -- the 13 x 52 week moving average upside crossover signaled continuation of the dominant bull move. As we speak the SPX is flirting with such a scenario once again.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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