S&P 500: Record Highs (Yay), Hourly Chart Guides
- New record highs, ‘yay’
- Swing trades from either side not appealing
- Hourly chart as a guide for short-term traders
The S&P 500 made a solid move into new record territory yesterday. The idea of buying into this current leg up for anything outside of a ‘quick-flip’ doesn’t look appealing; bottom-line, it is tough to be a buyer with swing-trade intentions after such a large advance since post- ‘Brexit’. And even harder to be a short into strong momentum.
In the short-term, the market remains overbought, but as we are seeing overbought is becoming more overbought as new highs get recorded.
Focusing on the hourly chart: Yesterday we noted a channel developing at one angle, but since pushing higher that angle has changed. The channel dating back to Monday will be our guide in the near-term. Stay within or above and a bullish bias will sustain. A break below doesn’t give the bears a tremendous advantage, but it could mark the start of some type of decline.
Short-term resistance is penciled in at the upper parallel, currently in the low 2060s. Support is the lower parallel; below there the trend-line off the 6/27 low; and not far below there the record high the market broke above at 2137. 2127 and 2112 are a bit too far below to worry about just yet.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.