Looking at the SP500 intraday chart, it shows the price on Friday had broken below the original short term rising trendline (1) and it remains above the pivot low. A new set of trendline (blue dash line) has been drawn and it is showing the intraday price action still confined within a triangle pattern. Until the price has broken through the recent low and falls below the October 15, 2014 close, or the price has moved above the 2040.24 level, the direction of the market’s next move remains unclear.
In the short term, the key level to watch is the pivot low at 1903.07. If it’s unable to hold above the pivot low, then the next potential support level to watch is the October 15, 2014 close at 1862.49. For the upside, the short term resistance is the 1993.48, and if it’d moved above this level, then the next potential resistance is at 2040.24.
SPX (intraday)
(click on the chart to enlarge)
SPY (intraday)
More and more market participants are expecting the market to fall further and at least to retest the recent low. It remains to be seen whether the market will do what the herd is expecting. As the saying goes, “The market fools most of the people most of the time.” Therefore, one shouldn’t attempt to predict what the market might do. Instead, always expect the unexpected. Until the respective key levels have been penetrated, one should remain defensive and be patient. The current market environment still favors the short term traders.
