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An important “Dual Test of support” is at hand right now for the 500 index. Long investors best hope it holds, because the support line off the 2009 low is very important! FYI- Support is Support until broken!
Twice over the past 12 years, the 500 index broke support lines of these rising wedges at (1) in the chart below and prices fell off quiet a bit.
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The above chart reflects how important it is for the “Dual Support to Hold” in the top chart at (1) to hold!
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Largest Bearish Head & Shoulders in 100 years?
Your observation is true about how high the 500 would have to go to kiss resistance.
The wedges in this post still worked despite steep support lines (see third time a charm)
C
Chris, the last times the SP fell considerably, it would first retest rising channel support as resistance (“kiss of death”) before falling, creating approximative double tops. However, recent rising support is so steep, the SP would actually have to make a new high in order to test it (around 1490). What do you think of this?
Apha…I don’t always do it by any means…yet I do attempt to find a more complex pattern or ones that are overlooked. Its all about treasure hunting!
Money is buried all over the word, the key is the “reading of the treasure map” that investors lay out in front of us all!
Chris
Belsha….I am short other areas, than the road more traveled by most investors (S&P 500).
Without getting really ugly a rising channel support line comes into play around 1,200.
Russell is breaking a support line off the 2009 lows, not pretty!
C
I noticed that too obvious patterns often are not realized. In fact, most of the patterns that you observe and that occur are more complex to discovered by most traders. You also use a combination of chart analysis, sentiment analysis and intermarket analysis to better exploit the market signals.
It’s correct what I say or it’s a self created hope for S&P500?
Thanks
What is your target level for a pullback here, Chris?
I have been thinking to wait for a pullback to 1405 before going short. What’s your plan?
Keep up the great work Josh!!!
Gordon….Thanks for the comment and agree with your observation
Largest Head & Shoulders in 100 years? Could be (See massive H&S post here)
I appreciate your viewership and thoughts Gordon,
Chris
If prices do break downward here, looks like we might be forming a massive head-and-shoulders pattern. I’m not saying this is about to happen, but it is something to watch.