Quick Planning the Key SP500 Trade Target Levels to Start the Government Shutdown Week

Sep 30, 2013: 10:43 AM CST

There are times when larger news situations overrule simple planning levels based on a stock chart.  This week may easily be one of those events.

With that in mind, let’s take a quick update on the Daily and Weekly chart-based key levels to watch (and create trading plans):

SP500 Weekly Chart Trend Trendline Government Shutdown Trade Planning EMA Support Bull Market

If this weren’t a week where the US Government may very well shut-down as of midnight this evening, we would simply reference the interplay between the Daily and Weekly key chart levels.

For the weekly chart, we can envision a continuation of the simple sell-swing already in motion.

The retracement developed logically from the divergence and reversal candle above the upper Bollinger Band, and now price appears to be trading lower toward the rising 20 week EMA (1,655 – our weekly target).

Keep in mind the potential for a breakdown under the 1,655/1,650 level which would open the market to a stronger sell-signal toward the 1,600 or 1,575 downside weekly targets.

With these potential downside targets in mind in the event of a continuation of the sell-swing, let’s look at the Daily Chart for a confirmation of the 1,655 target and key support or pivot level to watch today and tomorrow:

SPX SP500 S&P 500 Trade Planning Daily Chart Trend Trendline Horizontal Support Technical Analysis

We can start our study with a review of the September 9th “Daily Buy Signal for the SP500 Developing” which incorporates similar Weekly/Daily Chart integration for trade planning (the market successfully rallied up off the weekly target as expected in the post).

Similarly, we have a sell signal on the weekly chart targeting a potential movement down toward the 1,655 level.

At the same time, we have a lower rising trendline intersecting the 1,655 level as seen on the Daily Chart (confirming the potential downside target).

However, as is always the case with two-timeframes, we need to watch for any support bounce off a Daily Chart level that we can’t see on the Weekly Chart.

For now, it’s the 1,680 to 1,690 region which reflects not just the prior trading range (yellow highlights) but also the overlapping 20 day EMA (1,689) and 50 day EMA (1,675).

Short-term traders can monitor the intraday price activity between these levels and indeed today’s “gap open” resulted in an initial bounce up off the 50d EMA level.

Once again, a failure or breakdown here does open a simple and logical play down toward the 1,655 level which would hit the target of the Weekly Chart (short-term).

For planning further into the future, a breakdown or failure to support-bounce up off the 1,650 level could trigger a larger short-sale signal toward the rising 200 day SMA (simple moving average) near 1,600.

Continue monitoring price relative to these levels and of course follow headlines throughout the day with respect to the “Will they or Won’t they” fund the US Government.

Join fellow members to receive daily commentary and detailed analysis each evening by joining our membership services for daily or weekly commentary, education (free education section), and timely analysis.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new 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).

4 Comments

4 Responses to “Quick Planning the Key SP500 Trade Target Levels to Start the Government Shutdown Week”

  1. Trendline and Target Planning for the SP500 | Afraid to Trade.com Blog Says:

    […] update our analysis from the prior September 30th “Daily and Weekly SP500 Planning” post and note the current trade level to watch for trade decisions at the […]

  2. Trendline and Target Planning for the SP500 | manufacturer blog Says:

    […] update our analysis from the prior September 30th “Daily and Weekly SP500 Planning” post and note the current trade level to watch for trade decisions at the […]

  3. SP500 Trendline And Targets Says:

    […] update our analysis from the prior September 30th “Daily and Weekly SP500 Planning” post and note the current trade level to watch for trade decisions at the […]

  4. Trendline and Target Planning for the SP500 | electronics-trade Products articles blog Says:

    […] update our analysis from the prior September 30th “Daily and Weekly SP500 Planning” post and note the current trade level to watch for trade decisions at the […]