Last take a quick look at last week’s action in the S&P 500. After having that furious v-bottom rally the past two months the index ran into a strong resistance level and was met with rejection.
Third time not a charm
If you look at the chart in this post you will see that the 2810 area on SPX is a strong resistance point since late October as price was turned down after rallying to it multiple times.
Thus, it is not a surprise that after a large move higher the index ran out of gas at this level. After a sell of most of the week it closed green on Friday and sits in between that resistance of 2810 and the last bottom it made around 2688.
Upside and Downside
Obviously our nearest downside is the 2688, however even if price reaches there it won’t be a bearish sign unless that level is broken. Price can certainly test that last low before rallying higher to challenge the resistance above again.
Plus if the index were to sell of through 2688 then there is alot of real estate available down to 2630.
As for the upside, obviously 2810 is the line in the sand right now. A break above there would open up the all-time highs as the next upside target.
Let the cards fall where they may…
Just watch the price points and trade accordingly I suppose as opinion can get you in trouble. My opinion is that I’m not bullish this market and am really only looking for shorting opportunities, which honestly I missed this last pretty obvious one as I was in full property renovation mode.
Can’t get them all I suppose.