SP500 Continues to Respect the Range… For Now

Jun 29, 2015: 9:38 AM CST

With fears increasing that “all may not go well” with Greece over the weekend, markets dropped and gapped lower to start the new trading week.

At the moment, the US S&P too simply achieved an expected downside support target.

Let’s highlight this target and place today’s news within the context of the larger Range Pattern in motion, and of course plan what to do next.

Here’s the S&P 500 Daily Chart Range:

I connected as many price highs and lows in the “Rising Range” or rectangle-style pattern seen above.

The main idea is that price continues to bounce or play “Ping Pong” between the upper resistance and lower support lines which have adapted as the uptrend weakened through 2015 (on divergences).

Nevertheless, our short-term trading plan calls our attention to the movement “down away from” the prior high into 2,130 “toward” the expected lower support target at the current 2,075/2,080 levels.

Quite simply, all complex news aside, the market will either bounce up away from 2,075 once again as it has done within the rising rectangle pattern… or it won’t, at which case we will switch to aggressive breakout trading strategies.

Here’s a closer viewpoint of the key levels and our short-term trading plan:

If the range holds, price is likely to fall just a bit lower to test (touch) the lower support level into 2,075.

At 2,075, we’ll be on guard for another spike-reversal rally off support and will play bullishly if so.

However a trigger-breakdown under 2,075 that continues under 2,070 suggests “this time is different” which will open an aggressive bearish sell pathway lower as price moves “down away from 2,070” perhaps toward 2,045 or lower.

Keep these simple levels in mind and react accordingly.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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One Response to “SP500 Continues to Respect the Range… For Now”

  1. Quick Quad-Market Reaction Grid to Start the Week | Afraid to Trade.com Blog Says:

    […] S&P 500 continued to “Respect the Range” and trade “Down Toward” the lower support level near […]