On daily chart, the index obviously is moving within a flag-shape pattern. This flag started with the low at 1101, and was upwards sloping.
Currently, SPX is at the very middle of the flag. It is hard to tell which way it is going to move, but we can keep aware of the support and resistant levels.
Considering again the red flag, we can find the resistant at around 1,260 and support at 1,170. These are the major levels we have to watch.
Another important observation is that stochastic-slow is showing a divergence regarding the movement of the index. This shows that the rise of SPX is relatively weak and would probably plunge.
Breakdown of the flag shape will further confirm the flag as bearish continuation flag in the middle of the bearish trend, signaling further slump.
Weekly chart of S&P500 Index (.SPX):
Weekly chart basically tells the same story. In addition, I have added a fibonacci retracement using the high and low in April 2011 and June 2010.
We can see that the levels are pretty strong in terms of supporting/resisting SPX.
On the other hand, MACD and its EMA is touching each other. We have to wait until the end of this week to confirm whether there is bullish cross or its just a zig-zag.
So the support and resistant levels are almost the same: 1,170 and higher than 1,250.
Good luck.
No comments:
Post a Comment