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The Power of the Pattern shared on 11/25/13 that the S&P 500 didn’t face stiff resistance until the 1,929 price level, highlighted in the chart above. (See post here) Why the 1,929 level? Two price points were meeting at this level, support dating back to the 1987 & 2003 lows and a Fibonacci extension level based upon the 1974 & 2003 lows.
Below is an update to this chart…
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The the original posting around Thanksgiving, the S&P 500 has gained just under 7%, putting it within 1% of the target shared over 6 months ago.
The 1,929 price level seemed a little more important of a price point due than normal, due to the long-term lines tied to some of the most emotional prices points in several decasde (1974 low/Nixon impeached, 1987 crash low, 2003 lows and the 2007 highs). All of these come together at one price zone, creating a central zone of resistance.
Where do we go from here? The trend is up in the broad markets (above 200MA and Advance/Decline line is at all-time highs). A breakout would be very bullish, if it takes out all of this resistance which would suggest the trend continues. If for some odd reason the trend changes on a dime up here, these price points would be more important than they might seem right now.
Stay tuned….
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