Significant support for Mar S&P resides in the 1413/17 area and that zone has held several tests over the past month of trading. While it is positive to see that zone hold back weakness, the problem is that the market is not able to move up and away from this area the way it had over the last several months of the current rally.
Persistent tests of a support zone like the market is currently seeing is a warning sign that a break lower is in the works. Volatility (as measured by the daily Bollinger Bands) can't really get much tighter so this market is poised to expand the range over the next few weeks.
At this point is appears that a break below the lower end of that support zone (1413) would be the trigger to see volatility expand and set in motion a decline toward measured-move targets in the 1380 area. A close below 1413 would also leave the contract below the 50-day moving average, which is a reference that the market has not closed below during the past five months.
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