- Technical Market Commentary -

May 28, 2010 (FinancialWire) (By Frank Kollar) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — Both the S&P 500 Index (SPX) and its tracking ETF the S&P Deposit Receipts (NYSE: SPY) tested critical support levels this week and so far those levels are holding.

For the SPX support was at the February 5 intra-day lows at 1044.50. On Tuesday, May 25, the SPX reached 1040.78 intra-day but finished that day with a close well above 1044.50.

For the SPY support was at the February 5 intra-day lows at $104.58. On Tuesday, May 25, the SPX reached $104.38 intra-day and finished with a close well above $104.58.

Though the declines these past weeks have been steep, and several short term support levels have fallen along the way, this is the one support level that must not fail.

Should the SPX close below 1040.78 and the SPY close below $104.38, we will be looking for a new leg down that could last weeks to months or more.

Disclosure: The Fibtimer.com Stock Timing Strategy holds a position in the S&P 500 SPDRS (S&P Deposit Receipts).

(Go to http://www.financialwire.net/2010/04/22/about-kollar/ for more about Mr. Kollar, and go to http://www.financialwire.net/?s=kllrfby+cmmtry for more of Kollar’s commentaries.)

(Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.)

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