The Crystal Ship, a classic by The Doors, begins with the line, “Before you slip into unconsciouness, I’d like to have another kiss…” Could you hear traders singing that line to the market as last week ended? In three-part harmony no less.

We watched the indices and several key sectors and how their price moved around the standard floor trader pivots.

We particularly focused on S1-or the first support line on 30 minute bar charts. On our watch for breaking S1 was, S&P 500 (SPY), Russell 2000 (IWM), Transportation (IYT), Semiconductors (SMH) and NASDAQ 100 (QQQ).

To narrow down the focus, we dwindled it down to SPY and discovered that to date, it has not closed under S1 for the 20 trading days in January. While it broke S1 twice so far in January on an intraday basis, the ensuing rally has kept it from slipping into unconsciousness. As such, the Bulls have received many kisses.

I’m thrilled we have a simple guide like S1 to follow. Want to know why? In SPY, S1 was at 282.36 on Friday. For Monday, it comes in around 284.80. Way tighter. The huge rally that occurred by the end of the session on Friday, raised the S1 level and the stakes.

What excites me now, is the knowledge that an intraday break of S1 could mean that momentum is fading. Yet, a close under S1 would break a streak and suggest that a correction is in store. So, if we keep eyes on S1 in the SPY, and it continues to hold by the session’s close, the “crystal ship is being filled, …. a thousand thrills.” And, should it close below S1, whether it’s Monday or another day next week, “Deliver me from reasons why, you’d rather cry, I’d rather fly.”

The other two instruments we are watching Transportation (IYT) and Semiconductors (SMH) recovered from their weakness by riding the strength of the indices. The most reliable signal then, is if all three, IYT, SMH and SPY, close below S1 on the same day. If so, I cannot imagine a clearer signal to at least stop buying new longs and at most, lighten your exposure and consider adding protection.