The 80 Week Moving Average

As can be seen in the chart below, a 3 year weekly chart, the 80 SMA has worked well as a support line for the uptrend of the market over time. This support line was broken to the downside the last week of 2007. The question is: Will it be a resistance line as well? As can be seen prices have come up to this line, which is somewhat like the 200 SMA on the daily chart, and bounced downward. Stan Weinstein discusses the 80 weekly moving average in his book - Secrets for Profiting in Bull and Bear Markets. The 80 week moving average is 1440 and the high this week was 1440.

The S&P500 was down 3.5% this last week and formed what is called a bearish outside key reversal pattern. This is when prices go above the prior week highs and close below the prior week lows. It is very bearish and indicates prices will most likely continue down. Click on chart to enlarge.