S&P 500: two scenarios
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What's on
The stock market seems to be on a bullish track now. The S&P bounced upwards from the support of 3870 where the three Moving Averages were converging and currently is flirting with the four-week resistance of 3935. What to do now?
Mid-term action plan
Watch how the index behaves against the resistance of 3935
Bounce downwards
- Factor in a possible downward reversal at 3935 like it happened on February 25
- Noting that we’re in a bullish trend now, if a bounce downwards happens, it will likely send the index either to the support of 3900 or 3870 before bulls take over again
Punching through
- If no bearish reversal pattern forms on lower timeframes around the resistance of 3935, it’ll likely be crossed
- Assume that upon crossing, the S&P 500 will go straight to 3960
- At the resistance of 3960, a reversal downwards may happen – factor in this potential and prepare the support of 3935
