What’s inside:
- The S&P 500 notches new record close, but…
- Still has resistance to contend with
- Wedging up between top and bottom-side trend-lines
Yesterday, the market moved higher by a modest amount, notching another record closing print in the S&P 500. It’s been tough sledding for the index, but it continues to press on and provide no solid indications for being a bear. Even as such, taking long entries hasn’t been the easiest of task – choppy summer trading conditions are making sure of that.
Despite the new high closing print, resistance in the 2186/89 vicinity has clarified itself as the market stalled around this area on several occasions. With the swing lower on Wednesday, we now have a trend-line off the 8/2 low, which helps provide some guidance. It’s pretty simple, hold on a dip or just even stay above and the trend remains higher. A dip below from right here won’t be an outright bearish indication, though, there is still support in the 2174/78 vicinity from the very tight late July/very early August range. It would require a break below both the trend-line and sustained trade below 2174 and the 2171 pivot created on Wednesday before we could entertain a firm bearish stance. A break below the bottom-side trend-line would be considered an outright short signal in our book if the following pattern fully matures...
Top-side resistance above the before mentioned zone (2186/89) comes in at the trend-line extending off the 7/14 swing high. With the top-side trend-line and recently established trend-line off the 8/2 low, we have the possibility of an ascending wedge should price continue to works its way between the two intersecting lines. If price wedges up nicely into the apex of the pattern, then the market could make a break for it with sustained force (in either direction). We will touch further on this development should it move from potential scenario to reality.
For now, continuing to keep it light and waiting to see how things play out with the current technical developments. Something with clarity should present itself fairly soon. It might be a quick-hitter, but if it has good risk/reward then it may be worth taking a crack at.
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
You can email him at instructor@dailyfx.com with questions or comments.
