Quick Breakout Level Planning on Dow SP500 and NAS ahead of the Fed

Jun 17, 2015: 10:28 AM CST

The Federal Reserve announcement and press conference today could be a catalyst for a breakout of the current trading range in the stock market.

Otherwise, we’ll continue to note these reference levels, targets, support and resistance zones into our planning of the next few trading session.

Let’s highlight these levels and targets first on the S&P 500:

The trend remains bullish and a critical support level has developed into 2,070.

We’re somewhat in a similar situation to March where price was underneath the 20 and 50 day EMAs (exponential moving averages) and three spikes off the 2,050 support preceded a bullish breakout that thrust the index to new all-time highs.

Above us we have a resistance confluence near 2,100 which is a Round Number, a Falling Trendline, and the 20/50 EMA cluster.

If we make the level planning very simple, we have:

  • A Bullish “Expect New All-Time Highs” Breakout Play above 2,110
  • A Neutral Range/Consolidation Continuation Zone between 2,070 and 2,100
  • A Bearish Breakdown/Liquidation Swing under 2,070 to target at least 2,050

Let’s chart these same levels on the Dow Jones Index:

The chart picture is very similar on the Dow Jones, only the levels are different:

  • A Bullish “Expect New All-Time Highs” Breakout Play above 18,000
  • A Neutral Range/Consolidation Continuation Zone between 17,700 and 18,000
  • A Bearish Breakdown/Liquidation Swing under 17,700 or 17,600

Finally, the NASDAQ Index shows a slightly different picture but similar planning levels:

We see a similar falling trendline but the Daily EMA Cluster is not as clear.

Our planning parameter levels are a bit wider:

  • A Bullish “Expect New All-Time Highs” Breakout Play above 5,075
  • A Neutral Range/Consolidation Continuation Zone between 4,975 and 5,075
  • A Bearish Breakdown/Liquidation Swing under 4,975

Whatever other strategies or indicators you are using, be sure to note these reference levels as targets and trigger spots as price moves – or perhaps doesn’t move – after today’s big Fed announcement.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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3 Comments

3 Responses to “Quick Breakout Level Planning on Dow SP500 and NAS ahead of the Fed”

  1. June 17 Fed Day Market Update and Stock Scan | Afraid to Trade.com Blog Says:

    […] Also, be sure to study today’s morning reference post “Planning the Key Levels for Today’s Fed Day.” […]

  2. Technical Analysis of the Markets Says:

    […] Quick Breakout Level Planning on Dow SP500 and NAS ahead of the Fed By Corey Rosenbloom […]

  3. Johnson Says:

    We need to be very careful with the breakout levels, as that
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    handle it. I always prefer to trade on the support and resistance zones since
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