The S&P 500 which is a good representation of the overall stock market, is still very much range bound, and is likely to remain so until the new year. A very quiet Friday with little volume did little to inspire confidence to the contrary.

1100 is the nearest main support level for the upcoming week, with a move below it indicating a test of 1098-1097 with the lower portion of the gap created Friday. Support beyond is 1095-1094 but movement to this level does indicate a high probability of retesting range lows. Support near the lower range is 1086 and 1084. A drop below 1080 (using a buffer below the lows) would punch us out of the range we were in.

The target for that breakout is 1055 which is just above a hourly trending support line (going back to Sept). There is important interim support which will provide us with other signals during the week. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November.

The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action to reach 1055 if in fact this market does break lower. This is because the average weekly range for the S&P is just over 37 points, and the market closed on Friday right around 1106.

On the upside resistance is at 1109-1111. A move above this area represents the likely scenario that range highs will be tested. The resistance area near the highs is 1116-1120. If this range is broken out of, targets are 1123, 1128 and 1131.

Analysis by: http://www.Forexpros.com - Written by Cory Mitchell for Forexpros

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