After busting through its previous support level of 1,200, the S&P 500 dropped to an intraday low of 1,100 in early August. As we pointed out in our last technical analysis update, longer-term charts show that stocks have significant support in the 1,100-1,150 range. That support level has been confirmed by the price action over the last six weeks. The S&P 500 has tested, let’s call it, 1,125 on four occasions over recent weeks. Each time, the market hit 1,125 it bounced higher. But the rallies have failed each time the index approached 1,225. Stocks have carved out a 100 point range between S&P 1,125 and S&P 1,225. A break below 1,125 on the index would likely signal another 5-10% of downside while a break above 1,225 would signal further gains. The key levels to watch are 1,125 and 1,225.