S&P 500 Supported for Now
- S&P 500 dips back into support, holding for now
- Until support is breached, bias is neutral to bullish
- Important levels outlined
In last week’s post, we were discussing the breakout in the S&P 500 from the multi-week basing pattern; the market was looking good, our eyes were set on 2300/20 based on the depth of the consolidation formation.
We had this to say about a pair of lines on its way higher: “Minor resistance lies at the under-side of a pair of trend-lines around 2290/95; one off the Feb low and the other from November.”
'Minor', as it turns out, understated the importance of this confluence (at least in the short-term).
The S&P traded around this confluence for a couple of sessions before dropping back. It was labeled ‘minor’ due to the lines running with the trend – had they been converging down on price, different story. At any rate, should the market finds its way back up towards these lines, we’ll place more emphasis on them next time given how the market responded.
The dip off the highs found support at the trend-line off the 12/30 low, and on all three days this week, so far, the market has been able to recoup a good chunk of intra-day losses. These mini rebounds are coming on attempts to trade back below last week’s breakout. The market could be in the process of attempting to roll over from here, but it will need to clear support, first. Until it does, we will maintain a neutral to bullish bias.
The before-mentioned trend-line and Tuesday low at 2267 are first in focus. Below there comes a top-side trend-line running all the way back to 2007. It’s quite an extended period of time, but given the three responses by the market to hold dips since the middle of December, it’s in play (~2260). Below there, we have the 1/12 low at 2254; and below there is where some room opens up for a move to the 2015 top-side t-line and the low created on the final day of 2016 at 2233.
S&P 500: Daily
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.