SPX: 800 Support?

The SPX closed at a nice even 800 on Friday and has started to create a bottoming tail on the monthly charts at the 2002 lows. Technically this now becomes a very important area to hold. With 3 straight months down I'm now looking to see if it can move up to cross and hold 840 which would be a 33% retrace of the current monthly bar. Notice that the November monthly is larger then Sept and Oct bars. Historically this is indicative of exhaustion from sellers and can signal the start of a relieve rally once 33% of the November bar is retraced. This is likely area some will take a stab at some longs swing trades and a good area from their stop would be 750.

I can feel the desperation in the markets for any reason to rally as we saw on Friday afternoon with some political appointment announcements. This is at the same time Citi is still on it's deathbed along with the auto industry. I am still bearish the market, but there is likely some money to be made in the quick relieve rallies we're likely to see over the next few days and weeks.

I'll be keeping my eye on the VIX as well as the key resistance areas on the price charts. The moves up are likely to be just as tricky as the moves down where levels of support and resistance may work only 50% of the time. We certainly saw key support areas ignored on the way down, so I am preparing for the same thing on the way up. The market is best in emotional times like this at creating surprises.

SPX Monthly Chart: