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January 16, 2012  Mon 8:37 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES

The S&P 500 has rallied nicely this year but is now back to resistance levels, so it's time to be a little more cautious on the long side.

The index is stalling right around the same 1290-1296 area that was support back in mid-July before the market crashed. That also marked the top after we bounced in October.

Another consideration is that the 100-day moving average (gray line on the chart below) is still below the 200-day moving average (green line). We might need to consolidate a little while longer for those moving averages to line up correctly. (The 100-day should be above the 200-day for us to rally. For a similar set up, look at 1994.)

All those things, against the backdrop of Europe, suggests that time is still needed. There are lots of reasons to be either bullish or bearish, and I won't try to say which way the market is going next. For now, it's just worth appreciating where we stand.

SPX

(A version of this post appeared on InsideOptions Pro on Friday. Chart courtesy of tradeMONSTER.)

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