SP500 Bullishly Breaking through Resistance Zone

Feb 22, 2016: 11:48 AM CST

Might the S&P 500 break powerfully through resistance from the current “Neutral Zone?”

If so, what are the upside targets?

Let’s highlight our current “Neutral Range Zone” levels and plan for a possible breakout:

I’ve been charting for members the “Repeat Pattern” of October 2015 which you can see highlighted above.

Let’s start there.

In October, we had a similar strong sell-swing into a Double Bottom price pattern (1,880) with a Positive Momentum Divergence.

Price rallied strongly toward the underside of the (blue) 50 day EMA and paused into this level.

Keep that spot in mind – it’s the beginning of October.

In terms of planning the next swing, price could either:

Trade “Down Away From” the 50 day EMA just under 2,000 or…

Break powerfully above it and move “up away from” the resistance pivot toward the 200 day SMA (red).

Ultimately, price broke powerfully above it, triggering a short-squeeze bullish impulse straight to the 200 day SMA.

We’re using the same logic right now at the end of February 2016.

Once again either price stalls into resistance or – perhaps more likely – breaks powerfully through it.

Either way, our “Neutral Range Zone” extends from 1,900 to 1,940 as highlighted.

A continuation higher opens the market for aggressive bullish trades toward 2,000 and 2,020 (200d SMA).

Whatever other strategies you’re using, focus on the current levels, possible breakout, and similarities to October 2015.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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3 Comments

3 Responses to “SP500 Bullishly Breaking through Resistance Zone”

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    […] In fact, the broader S&P 500 forms a similar pattern (and comparison) as I wrote earlier this morning. […]

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    […] For the broader (Daily Chart) perspective, see yesterday’s S&P 500 Breakout or Range Update. […]