There’s the Break but Will it Hold?

Jan 27, 2016: 1:27 PM CST

There we go! The S&P 500 surged above 1,900 this morning!

However, is this the start of a new bullish breakout swing or just another bull trap in an ongoing downtrend?

Let’s chart the breakout – note the hidden resistance above 1,900 to watch – and put it all in the context of today’s Federal Reserve announcement yet to come.

A quick glance at the chart above shows the ongoing downtrend and possible short-term reversal for the S&P 500.

A V-Spike Pattern thrust price higher on January 20th and price fully traded up – as expected – toward the 1,900 level.

We’re seeing price pierce 1,900 and impulse higher but let me draw your attention to the “hidden” resistance.

The 38.2% Fibonacci Retracement level – a target which is serving as resistance at the moment – is 1,915.

If we objectively plan the short-term future, we’ll be aggressively breakout bullish above 1,915 (target 1,950) and otherwise neutral between 1,890 and 1,915.

We’d open a bearish short-sell pathway underneath 1,890 (targeting at least 1,850).

Keep these simple levels in mind as we await the Fed’s “We’re Not Raising Rates Anytime Soon” announcement.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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3 Comments

3 Responses to “There’s the Break but Will it Hold?”

  1. S&P 500 Surges above 1,900 Says:

    […] By Corey Rosenbloom […]

  2. Moin Says:

    It looks pretty much downtrend, but we should take proper measures, it can be very risky to go with just predictions. I always prefer to have extra careful approach and due to OctaFX, I am able to get it done fairly easily and that’s with the 50% bonus on deposit offer, it can be gained from as low as 5 dollars investment on their ECN account plus we can use it within margin levels and that is the real deal for me.

  3. Moin Says:

    It looks pretty much downtrend, but we should take proper measures, it can be very risky to go with just predictions. I always prefer to have extra careful approach and due to OctaFX, I am able to get it done fairly easily and that’s with the 50% bonus on deposit offer, it can be gained from as low as 5 dollars investment on their ECN account plus we can use it within margin levels and that is the real deal for me.