I annotated a daily chart of the SP-500 below in detail. I understand and vehemently contend that K.I.S.S is honestly the philosophy of importance in this business,yet for this broader perspective,the beauty and symmetry of this action should be noted. The chart looks confusing, which is why I made each marking a certain color. The red trendlines run parallel to each other, and the red circles reveal the significance of the red trendlines. The blue trendlines run parallel as well, and the blue circles and rectangles reveal the significance of the blue trendline. The fat purple horizontal line is the neckline of the massive head and shoulders top, which we broke in August, and are now looking to retest it. The main point I want to bring to you is the 1265-1275 area. The more points of reference that cluster together in the same spot, the more significant it is. And seeing as we are looking to test the; 200SMA, neckline from h and s top, HUGELY SIGNIFICANT uptrend line from July 2010, and downtrend line from the right shoulder, all in the SAME EXACT AREA of 1265-1275, is massively significant. MASSIVELY. After you review this chart, look at where that area shows up on the weekly, which brings me to post a weekly chart with annotations as well.
Here is the weekly chart: See where that 50MA weekly is? 1267!!! same EXACT level, giving it so much more importance by the fact that it is Huge on weekly and daily timeframes! and that huge 1265-1275 level on the daily is the same exact spot where on the weekly all of the following levels appear on this timeframe in one and same exact spot. 50SMA, neckline of a longer term more significant head and shoulders ( i point it out on this chart) hugely significant uptrend line from 2009 (the green one). here it is