Plotting the New SP500 Price Structure Pathway off Support

Jul 9, 2014: 10:21 AM CST

I wanted to update the simple “Color Price Structure” chart I’ve been showing all week with respect to the simple yet effective price planning pathway for the S&P 500.

Let’s take a look at the current “Color Structure” chart and plan how to trade the current swing already in motion:

To get a sense of what this chart means and how we’ve been following it (first planning a swing down from the upper trendline which occurred yesterday and then planning a likely bounce up off the lower trendline support), see the prior updates entitled:

July 7: Planning the Next (Down) Swing from Resistance – Color Structure

July 8: Planning the Next (Up) Swing from Support- Color Structure

Now we’re seeing the expected up-swing or rally higher off the 1,960 price and rising trendline support level.

For planning now, we still have the ongoing “Dominant” or logical thesis to expect a price swing up at least to the Midpoint or 1,975 level (almost achieved already) and then should price break through the 1,975 midpoint, it triggers another buy signal to target the upper trendline intersecting 1,990.

Of course, we can’t just plan what “should” happen and ignore evidence to the contrary.

The Alternate or Breakdown/Breakout (destruction of the rising parallel trendline channel structure) Thesis triggers on a break then close under the lower rising trendline (and especially the 1,960 index level).  The logical downside breakdown target would include a movement at least to 1,950.

Join me for a Live Webinar Thursday:

Also, I’m excited to be teaching an educational webinar with Trader Kingdom this Thursday (July 10th) at 3:30pm EST entitled “Stalking the Short-Squeeze: Protection and Profit from Unexpected Events” which will help you increase your ability to plan market events (and trading strategies) like this.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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