It Could Be A Pivotal Day For The S&P500

We’re intrigued as to which way the S&P500 trades today, given the importance of support it is sitting on.

Starting on the daily chart we can see that the double top pattern hit target and prices have since stabilised above September’s low (2864.12). Despite its bout of weakness since 2940.91, bulls will no doubt be focusing on the dominant bullish trend with a view to take it to record highs once more. At the same time, they’ll likely take comfort knowing that a bullish hammer respected a zone of key support which comprises of the September low and a bullish trendline.

If all goes to plan and the support cluster holds, the 2940.91 high appears within easy reach. However, whilst negative sentiment surrounds global stocks and yields continue their rampage, the upside for S&P500 could be limited near-term. And if this sentiment is to persist, we could find a breakdown more compelling as it would be against the dominant trend.

So be on guard for a breakdown as a clear break of yesterday’s low invalidates key support, which leaves a potential 65-point drop up for grabs. But, whichever way it trades, we think yesterday’s low could prove to be a pivotal level for both bulls and bears.

 

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