Home > Short-Term Trader > Waiting On The S&P To Break Lower Away From Resistance

Waiting On The S&P To Break Lower Away From Resistance

Global markets, impressively despite major Euro weakness, have held onto Monday's monster move and ground their way higher in a channeling manner. Currently, the S&P 500 is in the upper portion of the resistance zone I highlighted on Sunday evening. If we should push above 1173, it is a very short run up to an even bigger zone of resistance residing at the neckline of the head-and shoulders pattern (1177.50 ES futures) highlighted on April 29th. Also, this will run the ES into a trend-line coming off the high which combined with the H&S neck-line gives us stiff resistance from 1178-1182.  At 1178 a 76.4% Fibonacci retracement level exist as well.

Spx

The game-plan is to see whether we break lower from the current level or make one more push higher into the next major resistance zone. In either event, I want to see the market start breaking back lower creating some technical damage before initiating any short positions. By waiting for a break we can assess our risk using the pivot high as a barometer for measuring risk and setting stops. The first area of significant support comes in at the Gap day low of 1144.25. If that were to be taken out then I would expect a full fill of Monday's gap in fairly short order.

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Categories: Short-Term Trader
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