S&P 500: Battle at Highs a DT or Basing Formation?
- S&P 500 struggling to push into new record territory
- Double-top or growing base for higher prices?
- Going with latter for now Levels & lines of interest noted
If the recent price action in the S&P 500 were to be summarized in one word, it would be – tough. There is a battle going on around record high levels, yesterday was another testament to the struggles the market is having in its attempt to extend into and sustain new record levels. A semi-bearish key reversal bar developed on an attempt to push above the Friday high; ‘semi-bearish’ emphasized because of choppy market conditions and the fact the trend-line off the November low arrives just a short distance below.
In recent posts, we have expressed that a choppy trading environment could lead to a broader base from which the market could trade higher from. This view remains intact. If the S&P starts to decline with some velocity, though, this could quickly change. A hard jab lower could further along the notion of a double-top taking shape from the December high. But until we see hard selling we will take what is presented to us at the moment.
A clear daily close above the Friday (1/6) high of 2282 opens the door up for more gains, while a minor push lower and hold of the November trend-line still keeps the current technical structure working towards an expanding base and a potential breakout down the road. Even if the trend-line were to give-way to selling, as long as it isn’t aggressive, the basing scenario will still be in play and the double-top formation on the back-burners.
S&P 500: Daily
Created with Tradingview
Paul holds webinars at 10 GMT on Wednesday, Thursday & Friday of each week. For details, check out the Webinar Calendar, as well as the full schedule of upcoming live events.
---Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.