The Great Wall of Resistance at SPX 1110

Jun 4, 2010: 10:48 AM CST

Let’s take a quick look at the “Great Wall of China” overhead confluence resistance at the 1,110 level in the S&P 500 – which is a key line in the sand between bull and bear.

A quick look at the daily chart shows three levels of (almost exact) confluence resistance in the S&P 500:

200 day SMA:  1,106
38.2% Fibonacci Retracement:  1,108
20 day EMA:  1,109

This exact level was also the overhead resistance on the swing to 1,110 in early February 2010… but that resistance was short-lived.

I just wanted to post a quick update of this reference level to watch.

Any break above 1,100 is likely to trigger a “popped stops” play similar to that of early March where buyers broke above the level, forcing bears to cover (buy).

However, if the chart resistance holds, then we’re on a journey back to 1,070 which is the ‘rectangle’ pattern boundary that we’re in now… and any move under 1,070 likely sends us to 1,040, which is the “Edge of the Cliff” for the market.

Also, reference the follow-up to the “Edge of the Cliff” post entitled:

“So, Why Exactly is Technical Analysis Important?”

Corey Rosenbloom, CMT
Afraid to Trade.com

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

3 Comments

3 Responses to “The Great Wall of Resistance at SPX 1110”

  1. Stock Market Update : Week 22 Says:

    […] how Corey Rosenbloom from AfraidToTrade.com put it, the ‘Great Wall Of China’, it seems like the market is going to have a hard […]

  2. theyenguy Says:

    Excellent technical chart and commentary as you relate “if the chart resistance holds, then we’re on a journey back to 1,070 … and any move under 1,070 likely sends us to 1,040”.

    Perhaps one might enjoy my market fundamentals report US Treasuries Recover As Stocks Fall On Disappointing Jobs Report And Sovereign Debt Default Concerns which begings “Today was an epic day in financial market history, as stocks gaped open lower and fell all day”. I've posted a lot of chafts there that one might find helpful … The devastation in European stocks and the Russell 2000 was quite severe.
    http://theyenguy.wordpress.com/2010/06/04/stock

  3. Pincher Player Says:

    Nice Chart and blog. I don't see us breaking that $1100. I see more of a test to hold the 940 levels from last June 08.

    Would create alot of pinchers if it does