The S&P500 has recovered a bit of lost ground in recent sessions but it closed the last one with an indecision-style candle AND still under major resistance. There are many commentators suggesting this is simply a bear market rally but others calling this the start of the next grand Bull market! Either way, from a technical point of view, it’s getting close to do or die time.
S&P500 daily: price is essentially stuck in ‘no man’s land’ at the moment as it trades under the recent daily support trend line and key 2,000 level but above the monthly support trend line and 1,900 level:
S&P500 daily expanded: note the indecision style candle: a bearish coloured ‘Inside’ candle AND a ‘Spinning Top’:
S&P500 daily Cloud: price action is still below the daily Cloud and, as for the weekly Cloud, this Cloud is aligned along the 2,000 level too:
S&P500 weekly Cloud: price is back within the congestion of the weekly Cloud. Note how the weekly Cloud remains aligned along the 2,000 level:
S&P500 monthly: I had been wanting a test of 1,600 so we could get it over and done with:
This may not evolve though and this could just be forming up into one big Bull Flag???
Summary: the 2,000 level is a major S/R zone for the S&P500. It is a key psychological level that has kept a lid on price action over the last three months. Add to this…. that it forms up the daily and weekly Cloud resistance zone then that just adds weight to its importance. Thus, I’m looking for the following clues to help guide me about where the index might be headed next:
- Bullish: for any break above the recent Bear Flag trend line, 2,000 level and weekly Cloud.
- Bearish: a clear rejection of the 2,000 level and daily and weekly Clouds and a move below the monthly support trend line.
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