Monday, October 5, 2015

SPX S&P 500 2-Minute Chart Battle at 1985-1988 Price Resistance

Do you think the 1985-1988 price resistance gauntlet is strong? (Scroll back to study the information in the SPX S/R missive.) Today's action tells the tale as the bulls were trying to punch up through but did not have enough gas, so far. The bulls will rest up tonight and give it another try tomorrow. The support below is 1978 and 1973. Note how price punched up through 1978 and performed a successful back kiss so it was on its way to 1985. For Tuesday, if 1985 fails price will drop back to 1978. The thin red lines show how when price made the intraday high it came with negative divergence so price retreated; it did not have the oomph to continue higher.

The purple lines show a potential diamond pattern. The diamond looks like it will make a decision at 10 or 10:30 AM EST tomorrow. Sometimes a diamond continuation pattern takes hold and sometimes price collapses in a diamond reversal pattern so no prediction can be made on direction only that potentially price will make a firm directional commitment tomorrow morning.

The battle at the strong 1985-1988 S/R gauntlet will determine the winner. Bulls win big above 1988 as price will then seek 2000+. Bears win under 1985 as price will seek 1978, 1973 and perhaps set its sights on back testing the critical 200 EMA on the 60-minute chart at 1957. The SPX moving above 1957 is a major victory for bulls today. The 20-day MA support is at 1948 and the 50-day MA overhead resistance is at 2000. Thus, if price breaks up through 1988 resistance it will seek the 50-day MA at 2000. 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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