S&P 500 Levels & Analysis 12/10/10

Good morning. The SPY is currently trading at 124.27 which puts the market above the resistance noted on the chart below and at a new high for not just 2010, but for the last 27 months. We will look for 124 to be our first level of support if the market experiences selling after the open and below that the 123.25 level should be a minor level, followed by the more meaningful 122.75. 122.75 was prior resistance and an area a lot of people referred incorrectly to as a “double top”. As for upside objectives, there is a level near 126.00-126.07 which was support on two occasions in early 2008 which may offer a potential area of resistance, but that level seems unlikely for today. Rather than obsessing about upside targets, focus on what you can control, being in the right stocks with reasonable share size and managing the risk on each stock individually, based on their key support levels.