S&P 500 Technical Outlook: Price Contracting, Readying for a Move
S&P 500 Highlights:
- S&P 500 coiling on the daily chart as indecision dominates
- Watching last week’s high/low levels for cues
- Tactical considerations in current environment
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The past few weeks have brought a good spat of volatility for the very short-term trader, but anything beyond a few days at most has been tough to get a handle on. It was just a correction, no, the S&P 500 is putting in a top, no, just a correction, and so on.
Congestion and indecision is reigning supreme right now. The current environment could get choppier before it gets better, which means we need to be patient before making too much of a commitment either way. Continued coiling of price action could be a good thing, though, as these situations of diminishing volatility can lead to powerful moves.
Which way? Again, that is yet to be determined. But whichever way the ball starts rolling is the way we’ll look to go. Last week’s high/low are starting to hold increasing importance during this indecisive period, from 2647 as support up to 2789 as resistance.
Further contraction of price then a break above or below the aforementioned thresholds is ideal. There is of course room for a fake-out, but we’ll address that a later time should it become relevant.
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S&P 500 Daily Chart
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---Written by Paul Robinson, Market Analyst
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