A week ago today I shared that the 500 Index was facing a 50/50 challenge (see chart below)…reflecting that the 500 index was setting on its 50% Fibonacci support level and the VIX (Fear Index) had just hit its 50 level, which was suggesting a counter trend rally was close at hand. (see post here) 

End result due to this 50/50 situation….For the week, the 500 Index gained almost 5%.

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Below is an update on the 500 index, from a Macro and Micro point of view…

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From a Macro point of view…The 500 index seems to be finding support based upon higher Fibonacci retracement levels (see above left chart). 

On a Micro basis the VIX looks to have created a series of lower highs and is breaking a steep support line while the 500 index looks to be doing the opposite, breaking a key falling resistance line.

On Thursday of last week I shared  in the quiz, that Bull market leader Apple, was acting strong despite the news that Steve Jobs was stepping down.  An upside breakout looked possible, which could have positive spill over effects for the broad market. (see post here)  

A week ago the 50/50 situation was suggesting that prices should move higher in a counter-trend move and the 500 index rallied almost 5% on the week. Is the counter trend move over?  Odds favor the move has more to go on the upside, due to the 500 index breaking above Resistance and the VIX breaking below support. 

Keep your eyes on how the VIX does here! A further breakdown in the VIX should translate into higher 500 prices.  The 38% retracement level comes into play around the 1,210 level, roughly 4% above this past Fridays close.  For those of you that that went long last week due to the 50/50 post….will see what the charts look like to see if we harvest gains at the 38% level.