Key Inflection Planning Level for SP500 Topping Pattern

Mar 27, 2014: 2:06 PM CST

The S&P 500 continues to play out the “Repeat Topping Pattern” scenario I mentioned to members and on the open blog.

So far, price has moved down against the 1,875 level as expected toward the initial support target into the rising 50 day EMA.

Let’s update our chart and plan scenarios based on whether price holds – or breaks – this key target support level.

For now, the short-term (including swing trading) price level to watch is 1,840 – it’s the rising 50 day EMA target (achieved with a bounce today) which returns us to the consolidation phase in January.

As I highlighted on the prior “S&P 500 Topping Pattern” post, we’re seeing a repeat pattern of a push to new highs followed by a weaker, second push to a tiny new high on negative momentum divergences.

The result of each of the three historical patterns has been a stable downside retracement – that’s precisely what we’re seeing so far now.

A failure to hold – meaning a breakdown under – 1,840 opens the market to additional downside targets including the rising 20 week EMA:

The Weekly Chart shows the rising 20 week EMA intersecting the 1,815 area which will be a quick downside target to play for on a clean break under 1,840.

Beneath 1,815 is the simple “Round Number” 1,800 reference price then the 1,775 price target.

Keep in mind that price tends to impulse (trade higher) and retrace (trade against the trend) with respect to an ongoing uptrending structure.

Focus on these levels and the real-time price action as price trades down against the 1,880 high (toward lower support/inflection targets such as these).

Construct intraday and short-term swings trades with respect to bounces up off these levels or immediate breakdowns under them.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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4 Comments

4 Responses to “Key Inflection Planning Level for SP500 Topping Pattern”

  1. Quick SP500 Trend and Range Surfing Update — Trading Your Own Way Says:

    […] S&P 500 trend, key levels in play, the current short-term range and update last week’s “Key Inflection Support for S&P 500” […]

  2. Quick Charting April Market Internals at the Highs | Afraid to Trade.com Blog Says:

    […] straight-up march from the 1,840 support level (see my prior post “Key Inflection Support Planning for SP500“) has been undercut by a steady decline (in indicator highs) in our “Big Three” […]

  3. Quick Charting April Market Internals at the Highs — Trading Your Own Way Says:

    […] straight-up march from the 1,840 support level (see my prior post “Key Inflection Support Planning for SP500“) has been undercut by a steady decline (in indicator highs) in our “Big Three” Market […]

  4. Quick Charting April Market Internals at the Highs Says:

    […] straight-up march from the 1,840 support level (see my prior post “Key Inflection Support Planning for SP500“) has been undercut by a steady decline (in indicator highs) in our “Big Three” Market […]