A Quick Look at the SP500 Current Trendlines

Dec 4, 2009: 10:37 AM CST

With the Jobs Report more than surprising the market this morning, let’s take a quick look at the current trendlines that will either contain this bullish surge… or break through to create a larger move to the upside.

What we’re seeing above is the @ESz09 or the December 2009 E-mini S&P futures contract (so we can also see the overnight action instead of all the gaps on the SPY or S&P 500 Index).

Originally, it looked like the trendline boundary was a horizontal line at the 1,110 area, but with the last two days of prices, along with this morning’s “Jobs” surge, it looks like we have an angular upper trendline that currently ends at the 1,117 area.

The lower trendline is consistent at the 1,085 area- with the exception of the “Dubai” induced “Bear Trap.”

The implication is that price will continue higher on a ‘breakout’ on any solid close (particularly on higher volume) above 1,117 in the futures, and 1,121 in the S&P 500 Index (remember that 1,121 is the 50% Fibonacci retracement from the 2007 high to the 2009 low – a critical area).

Barring any breakout to new highs, the expectation would be for price to fall back against overhead resistance from the trendline and find its way down to 1,095 or even 1,085 in the futures.

Be safe!

(Other notes – watch to see if the bullish action in the Dollar Index holds, as well as the $25/$30 sudden point drop in gold prices – intermarket relations are being push/pulled this morning)

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

4 Comments

4 Responses to “A Quick Look at the SP500 Current Trendlines”

  1. terlyn Says:

    US dollar resistance is at 75.88. If it can break through that, the trend will change, according to EWI. There are conflicting interpretations of the jobs report, so the market seems confused.

  2. Corey Rosenbloom, CMT Says:

    Markets seem totally out of whack! Gold down $40 intraday, Dollar surging, markets surge then markets collapse, oil volatile. Perhaps lots of issues will be settled by the close today but it will be rough until then.

  3. terlyn Says:

    US dollar resistance is at 75.88. If it can break through that, the trend will change, according to EWI. There are conflicting interpretations of the jobs report, so the market seems confused.

  4. Corey Rosenbloom, CMT Says:

    Markets seem totally out of whack! Gold down $40 intraday, Dollar surging, markets surge then markets collapse, oil volatile. Perhaps lots of issues will be settled by the close today but it will be rough until then.