Quick and Dirty Market TA for 8.20.2010

I feel that there remains an over confidence in the strength of the US markets, and an irresponsible inclination toward equity price growth, or at least horizontal action without adequate appreciation for downside movement.  Remember, leverage as liquidity isn't liquidity at all.  Below a weekly SPX chart, click to enlarge, as always:

Light blue lines of resistance and support, as I see it:  1118, 1067, 1021, 944, 876.  Also, please note that 1141 has not been marked on the above chart, but it is a level that I am watching overhead.  This week's inverted hammer is entirely below a 50 week moving average that's on the cusp of rolling over.  Additionally, the MACD rebuffed the 0 line and is beginning to widen down.  No bueno.  An analagous situation from 2007 has been highlighted for effect.  I feel that next week's candle could bring -2 to -4% barring a major interventionist move over the weekend.

As tweeted earlier, "[I] feel like there will be a lot of chipper covered call writers tonight, and grumpy new longs next week."

Good luck.