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S&P 500: Short-term Trading Levels, Continued Pullback Expected

S&P 500: Short-term Trading Levels, Continued Pullback Expected

2016-11-29 13:08:00
Paul Robinson, Strategist
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What’s inside:

  • The S&P 500 drops back from confluence of resistance
  • Broken channel structure on hourly chart may help reinforce a pullback
  • Expect choppy trading conditions, but trades off levels still there for short-term traders

In yesterday’s post, we looked at minor resistance arriving by way of a confluence of a trend-line connecting peaks back to H1 2015 and the backside of the trend-line running up off the Feb 11 low. The market had been on a good run and was due for a pullback. At this time, it would appear a pullback will be shallow and short-lived before finding buyers again at the old highs around 2194 down to around 2188.

Looking at the 60-minute chart: Yesterday’s move pushed the S&P outside of a channel going back to 11/11. This is a mildly bearish event, undermining the short-term trend structure. This could be enough to help continue the decline from yesterday into the before mentioned support levels in the area of 2194/88. We will look to 2180 next if selling turns more aggressive. On a drop to support we will watch and see if buyers step in (i.e. - hourly reversal bar, bullish engulfing bar, etc.).

The only price resistance level to speak of is Friday’s high at 2213. In this area is the intersection of the daily trend-lines noted yesterday. This could be enough to keep a lid on a further advance in the very immediate future.

S&P 500: 60-minute

S&P 500: Short-term Trading Levels, Continued Pullback Expected

Created with Tradingview

Expect trading conditions to be somewhat choppy, as the market is still in bull-mode until proven otherwise. When at extended levels into new highs, the general tendency is for the market to ‘grind’. While this is the likely environment we face for the foreseeable future, there are still trades to be had off levels by those traders who focus on short-term time-frames.

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinonFX.

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

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