Quick Update on the SP500 Trend Channel April 27

Apr 27, 2010: 11:20 AM CST

For the third time in the last few days, we’ve broken slightly under the rising dominant trend channel as seen best on the 60-min chart of the S&P 500.

So far, that channel has held, but today, we’ve broken slightly under the channel so let’s take a hyper-focus on these price levels and what to watch:

(click for full-size image)

For reference, this trendline channel takes into account the price swings and highs from March and early April and projects into the immediate present.

We’ve had a bull trap in mid-April (false break outside the trend channel) and two mini-bear traps in late April (the two false breakdowns).

Currently, we’re officially beneath the rising trend channel which locates itself just above 1,200.

We’re testing the prior price swing low at 1,190, and just broke slightly beneath it (as of the time of this writing).

The next prior low is 1,183.

For reference, the rising 20 day EMA – which we’re now under – is 1,193.

I’ve written in the past about the importance of the 20 day EMA:

April 23:  Revisiting SP500 Trendlines and Adding a Triangle

S&P 500 Remains Above Trendline Support… for Now” and

Rising Trendlines… the Only Thing that Matters Now?

For reference, if we break under 1,183, then the rising 50 day EMA rests at 1,167.

Beneath that, we have the all-important “Line of Demarcation” at 1,150.

All of these are levels to watch as reference as we move forward in time.

Corey Rosenbloom, CMT
Afraid to Trade.com

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

1 Comment

One Response to “Quick Update on the SP500 Trend Channel April 27”

  1. TheYenGuy Says:

    While the S&P has fallen from it's channel; gold rose rose 1.7% up and out of a trading triangle as investors sought the safe haven of a physical asset.

    The downgrade of Greece sovereign debt by Standard and Poors represents a historic investment turning point — yes, both a mega investment and social shift has occurred.

    The Euro's decline is now accelerating; this is leading to deflation in European stock value. The current bailout framework agreement for Greece, the so called Euro Stability Pact, is a front runner, the first of its kind, where the European President, or President of the European Bank, or EU Finance Ministers announce seigniorage replacing the seigniorage for fiscal spending that comes from bond markets.

    A federal and feudal, political and economic government will arise in Europe; national sovereignty is quickly becoming a thing of the past: we are witnessing the birth of a one euro government where leaders announce policy and the people follow.

    Yen carry trades globally will unwind carrying out the same process in the United States, Australia, Canada, Mexico, Latin American, Brazil, Russia, India and China … risk aversion to sovereign debt and fears of sovereign default will cause competitive currency deflation globally.

    The direction for the S&P is down not up.

    I gained 6% on my “paper” short selling portfolio consisting of SRS, SJH, SCC, SSG, EEV, SMN, SMK, BZQ on Finviz
    http://www.finviz.com/screener.ashx?t=SRS,SJH,S

    Personally I am invested in physical gold and gold alone.