Last week I shared that “hope was not a strategy” and referenced long-term support and resistance channels. (see post here)
From a long-term channel perspecitve, the S&P 500 is within 4% of a support line that needs to hold…see below.
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Rising channel support that “NEEDS” to hold is a few percent below current prices. At this time I remain out of the stock market and am net short. Will look at protecting gains achieved by scoring on defense around support (2) in the above chart. Will see how the events unfold, per where is Gold and sentiment if the S&P hits the 1,050-1,100 level….this will determine if we harvest gains and if it is a time to go long.
Remained concerned for long investors if support line gives way at (2)!!!
Bruce…Great observation and question. I really like moving averages, yet what does one do when the markets chop around them for months, like the 500 index did a year ago. You are correct that the 500-EMA is just overhead. With the VIX so high and other fear tools very high, 1,200 could be taken out very quickly to the upside.
Thanks for your comment, viewership and brining up this EMA line,
Chris
Chris
take a look at the $SPX, it has resistance at the 500 day moving average and the $COMPQ and $INDU has resistance at their 400 day moving averages, What do you make of this?
Alpha….Great question, Great Fib eyes and yes the 50% fib level looks to be coming into play the past few days!
Dear Chris,
you often use the fib retracement levels to confirm the entry-exit market points.
S&P500 has broken 38% fib quickly.
Is now the 50% fib an reliable support? I see about 1120 level.
Thanks