Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
S&P 500: Suspended in Air, Turning to Hourly Chart for Clarity

S&P 500: Suspended in Air, Turning to Hourly Chart for Clarity

What’s inside:

  • The S&P 500 remains suspended in air following breakout to new highs
  • Hourly chart reveals lower highs in place, but…
  • Recent price action may be nothing more than a bull-flag developing

The S&P 500 remains suspended in air following the breakout to all-time highs. It’s been a few days since the current advance paused, so the question is: Is this in fact just a pause, or a sign of a turn lower set to ensue shortly?

Recently, we have been discussing the markets propensity in recent years of turning lower within days to weeks after moving to a new record high and trading back below the old record highs (in this case, 2137). But this can take some time to occur and the market can go into ‘grind-em-higher’ mode until it does.

When taking a look at the hourly chart we can see a small series of lower highs taking shape with a top-side trend-line capping the most recent advance on Monday. It’s not a blatantly bearish signal, but does indicate a weakening chart structure in the very near-term. But just as sellers step in, support in the form of a lower parallel not far below could halt a decline. Should the lower parallel hold on a further decline, a bull-flag could begin to take shape for another push to new record levels.

This doesn’t make for an easy proposition from a strong directional standpoint, but does possibly present a guide for operators on the short-term time-frames. Near-term support stands at the lower parallel in the low 2050s, then 2146 & 2137. Resistance comes by way of the top-side parallel around 2165, then the prior high at 2174.

SPX500 1-hour

Check out the DailyFX team Q3 forecast for FX, equity indices, and commodities in our free trading guides.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES