Feb 5 SPX Level and Trade Planning Update Chart

Feb 5, 2016: 12:17 PM CST

With price collapsing once again as the downtrend continues, the S&P 500 index faces a critical “make or break” challenge at a key pivot level.

Let’s pinpoint this level and get ready for the next swing yet to come.

Here’s our simple Daily Chart with reference levels:

Before focusing on the current level, be sure to note the upper range levels from 2015.

Price had a key support reference pivot near 2,055 and a resistance pivot near 2,125.

The market bounced between these levels and even returned to them after the August price collapse.

Ultimately price departed from this Value Area (Range) and created a new one where we are now.

Our current range reference level is smaller and spans 1,870 to 1,900.

We’re looking to trade a downward break under 1,870 toward the 1,820 level IF support fails.

By the same logic, we’re cautiously bullish if stocks hold above 1,900 (though the recent move up was a trap).

As always, focus on simple price levels and incorporate these into the indicators and analysis you’re using for your trades.

It’s helpful to focus on reference levels and then plan your trades as price moves “toward” or “away from” a level.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

1 Comment

One Response to “Feb 5 SPX Level and Trade Planning Update Chart”

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