Breakout from Range Levels in Dow and SP500

Feb 25, 2016: 12:08 PM CST

Both the Dow Jones and S&P 500 have bounced between daily moving averages in a key short-term range level.

Soon, both markets will break free from this range.

What’s the range, where are the breakout levels, and what may happen next?

Let’s start with the S&P 500 key levels:

For the S&P 500, our key range levels include 1,900 to 1,940.

We had a slight “Bear Trap” Reversal yesterday on a blip beneath 1,900 that was bought/supported by buyers early in the session.

The result – and expectation – was that price travels higher “away from” 1,900 “toward” 1,940 again.

That’s where we are this morning and where we’ll continue our trade planning.

A bullish breakout and reversal above 1,940 and 1,945 “should” lead to an extended bullish swing toward 2,000 or 2,020 like the similar pattern from October 2015.

However a close beneath 1,900 in the future would continue the bearish/downtrend and open a sell-short pathway back toward 1,820.

The picture and planning are similar in the Dow Jones Industrial Average:

Our key short-term trading levels – estimated – in the Dow include the 16,600 upper resistance and the 16,200 lower support.

Note also the 20 day and 50 day EMAs (green and blue) for additional level planning – price has roughly bounced between these averages once entering them earlier in February.

Keep your focus on these levels and the eventual – inevitable – breakout yet to come.

Speaking of volatile markets, check out this new video on trading strategies from my colleague John Carter:



2 Responses to “Breakout from Range Levels in Dow and SP500”

  1. Bullish Surge Update and Stock Scan Feb 25 | Afraid to Blog Says:

    […] Will price break out?  See this morning’s update for targets if so. […]

  2. Mixed Market Update and Trending Stock Scan Feb 26 | Afraid to Blog Says:

    […] Will price continue to break out? See yesterday’s update for targets if so. […]