Key SP500 Trendline Planning Levels to Start the Week

Aug 3, 2015: 10:16 AM CST

Short term traders benefit from taking a moment to view the larger picture of ongoing trends.

There’s a clear trend – and clear levels to watch – in the S&P 500 during the ongoing bull market.

Let’s update our “Parallel Trendline Channel” Structure and note what levels are important here.

First, here’s the broader picture of the S&P 500 trend stretching back to the 2009 Reversal Low.

During QE1 and QE2, stock prices rallied impulsively higher and corrected (retraced) during periods without Quantitative Easing from the Federal Reserve.

The current trend phase (highlighted) began late 2011 and has continued without a change in the pattern.

Note the Rising Parallel Trendline Channel that continues to contain price within the upper and lower levels.

Price has spent more time scraping against the upper trendline and only four touches (tests) of the lower line.

We can actually see a better perspective of the key levels by viewing a tighter perspective:

Again, we see the beginning of this pattern stretching back to late 2011 (without end at the moment).

For now, the lower trendline extends above 2,000 while the Midpoint (black) intersects the 2,135 price high.

Our upper trendline channel stretches above 2,200 and would be a valid target if price does begin another rally phase.

For now, we’re on guard for another potential touch of the lower rising trendline above 2,000.

This can happen either by price continuing to trade sideways as it has through all of 2015 as the trendline rises.

However, price could fall sharply once again down to this level before reversing higher to continue the trend.

Either way, note the pattern, levels, and continue planning your trades within this ongoing structure.

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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).

2 Comments

2 Responses to “Key SP500 Trendline Planning Levels to Start the Week”

  1. Ongoing Trends Benefit Short Term Traders Says:

    […] By Corey Rosenbloom […]

  2. Mike Says:

    Going with trend is definitely big benefit and this is the reason why I am so successful in my short career, I have strictly followed the trend and that has often made me win huge amount of money, but that’s not the only thing instead it’s also OctaFX broker’s lovely cTrader platform which has really upgraded system, so that allows me to work easily and bring quite a lot comfort and makes me get results in my favor without much struggle.