There’s the Break but Will it Hold?

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.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

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

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

Similar Posts

3 Comments

  1. 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.

  2. 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.

Comments are closed.