Time to Get Long Risk Again?
- SPX rebounds from key technical support level
- Next few days look critical for the index from a cyclical perspective
Unfamiliar with Gann Square Root Relationships? Learn more about them here.
The next few days look critical for the S&P 500. The index peaked out at the start of the two-week cyclical turn window we highlighted between the end of January and the start of this month. The short-term trend has most definitely turned down with the SPX having come under steady pressure since about January 23rd. With this important turn window coming to a close at the end of the week we are now on the lookout for a potential low and there is some chance that yesterday’s reversal from 1737 may have been it. If the index is indeed recording an important bottom around this time then price should not exceed this week’s low (whatever it may be) next week on a daily close basis. Strength back over 1795 will confirm a reversal. Should the index continue to weaken into next week then it will confirm a more powerful change in trend has occurred over the past few weeks and setup further weakness over the next few months.
S&P 500 Daily Chart: February 6, 2014
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risks in Coming Sessions:
LEVELS TO WATCH
Resistance: 1780 (Fibonacci), 1795 (Fibonacci)
Support: 1749 (Gann), 1737 (Fibonacci)
Strategy: Buy SPX on weakness
Entry: Buy SPX at 1749
Stop: 1-day close below 1737
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.