Friday, September 25, 2015

SPX S&P 500 Daily Chart Bear Flag Pattern

The SPX two-leg bear flag pattern is of interest to technicians moving forward. The first leg of the bear flag is down from 2100 to 1870, let's call it 230 points. Then price consolidates sideways with a slight upward bias which is textbook bear flag behavior. The sideways consolidation can be called a pennant with the thicker triangle lines or you can call it a flag with the rectangular consolidation. The peak of that consolidation zone is 2025 so the projection target for leg two would be 1795 (2025-230).

Price ruptured the bottom trend line which places the 1795 target immediately in play. Price has collapsed over the last few days so the recovery rally on tap today (S&P futures are +25 ahead of the opening bell) may create a back kiss move to that lower trend line so the 1965-1970 area becomes important. Bulls can negate the bear flag pattern if the SPX moves above 1975 heading higher. Bears will maintain the bear flag pattern downside projection as long as price stays below 1970. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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