Gap Filled: Is the SPX Cleared for Bullish Continuation?
Support and Resistance Levels for U.S. Indices, Futures, ETFs, Stocks, Crypto, and Metals.
The indecisive price action highlighted last weekend was validated by the pullback observed this week in the S&P 500. The final week of the year closed in the red, with declines of -1% for the SPX, -1.7% for the NDX, and -1% for small caps (IWM). However, this decline resolves a ‘loose end’ that would have injected significant uncertainty into the price action had we seen an immediate bullish continuation.
The $6,840 gap was filled, just as we considered last weekend and reinforced on Wednesday morning in the mid-week market update. Now, it is time to assess the market structure and key support levels for a potential resumption of the uptrend. For now, the new Central Monthly Level (CML) at $6,837 has provided support, and the price managed to close above its 20DMA, forming a triangle pattern that often precedes a major move.
Last weekend, based on indecisive price action and open gaps in the SPX and NDX, The Weekly Compass anticipated three high-probability bullish setups and two high-probability bearish setups.
The bearish calls performed well: TSLA exceeded its target, falling -7.8% for the week, while AAPL declined -0.9% (we will analyze continuation chances). Other bearish setups with lower probability ratings also tracked as expected, with PLTR exceeding its target (dropping -11% for the week) and IWM falling -1%.
On the bullish side, Bitcoin broke out above $88K, a key level we reinforced last Wednesday morning. Additionally, AMZN exceeded its bullish target before reversing rapidly, and AVGO also hit its target before pulling back.
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Anticipating these moves is a discipline based on the technical analysis shared here every weekend and Wednesday, combined with the support and resistance levels posted on Fridays. Technicals provide directional expectations, while S/R levels identify likely reversal zones. Crucially, the Central Weekly Level (CWL) serves as your risk management line: if breached, the thesis is invalidated, allowing you to protect capital.
For example, NFLX jumped on Monday as expected, nearing its target before reversing, the setup can be considered validated. Conversely, COST opened green but faded well short of its target; the price breached its CWL, invalidating the bullish thesis and resulting in a -0.4% move. Traders who used the CWL protected their capital before the decline deepened.
Today’s edition brings you the support and resistance levels for next week, along with the key monthly levels for January for the following securities:
Indices & Futures: SPX, NDX, DJI, IWM, ES=F, NQ=F
ETFs: SPY, QQQ, SMH, TLT, GLD, SLV, DIA, SH, PSQ
Major Stocks: AAPL, MSFT, GOOG, AMZN, NVDA, META, TSLA, BRK.B, LLY, WMT, AVGO, COST, JPM, PLTR, NFLX
Crypto & Related: Bitcoin, ETH, IBIT, MSTR
Leveraged ETFs: TQQQ, SQQQ, UDOW, SDOW, UPRO, SPXS, URTY, SRTY
By maintaining a broad market view, you can monitor conditions like a professional, whether rotating positions or refining entries and exits for specific names. This publication is designed to be effective for both strategies.
Now, let’s look at the levels. A quick reminder: Premium subscribers have the privilege of suggesting specific tickers. Last week, we provided over 50 key levels for subscriber-requested assets (including RCL, IREN, LULU, BABA, VXX, BITX, and many others), empowering members to catch reversals and ride momentum.
WEEKLY LEVELS
On Wednesday morning, before the market opened, I highlighted a specific condition: bullish setups were being invalidated after timid bounces. Securities either reversed rapidly and breached their Central Weekly Level (CWL), as seen with COST, or reached their bullish target zones only to reverse quickly, as happened with NFLX on Monday and AVGO today. The bullish setups quickly reversing and bearish setups staying in the red or accelerating (AAPL and IWM, or TSLA respectively) is the condition that demands caution for bulls.
Keep the Central Weekly Level (CWL) in mind for each security. For long (bullish) positions to remain valid, the price must hold above the values in the blue column below. Treat resistance levels as take-profit zones where reversals are likely—just as we saw with AVGO reversing at $351 and AMZN at $231.
Pay close attention to the CWL for SPX / SPY and NDX / QQQ. All of these four face significant work next week; they must reclaim these levels before we can consider a bullish reversal to be in play. Also, all of the Magnificent Seven are trading below their key levels. Conversely, Bitcoin and Ethereum are notably recovering their key levels. Here are the S/R levels for all the securities: