The Current Battle to Hold a Key SP500 Trendline

Jun 8, 2015: 12:00 PM CST

We’re back to the infamous “Will it or Won’t It” break or hold a key rising trendline.

We’re about to see a confirmed breakdown/breakout opportunity..or else another bounce/rally outcome.

Let’s pinpoint the key levels and be clear on our trade planning with respect to this level.

The chart above reveals a wider perspective of the recent creeping uptrend in price and a rising blue trendline connecting the closing and spiking lows through 2015.

Buyers held the market above this level repeatedly, except for a blip in early February.

Range and Volatility have been low, and you can reference these more detailed posts:

“A Quick Way to Measure Volatility.”

Current Low Volatility Environment Forecasting a High Volatility Future

“Quantifying Current Volatility in Dow, S&P 500, and NASDAQ”

Keep the chart above in mind as we drop down to a closer perspective of the planning levels:

This “Zoomed-In” Perspective reveals the four recent spike-reversals up off the rising trendline in 2015.

The simple level on which to focus is the 2,095 to 2,090 zone … and price is currently failing here.

Do reference the yellow highlights – four spike-reversals up off this level.

For objective planning, we’ll be short/bearish biased under 2,080 for a liquidation swing possibly taking price toward the 2,050 rising 200 day SMA.

If buyers intervene again and overtake the sellers, then we’ll play bullishly for a fifth time above 2,090 and especially above 2,100.

These are simple planning parameters but they’re likely to be effective as price moves away from this level.

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Corey Rosenbloom, CMT
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