Trade Planning off the 2000 Key Level in the SP500

Jan 15, 2015: 4:03 PM CST

It’s time once again to plan our intraday and swing trades off the key inflection (pivot) level 2,000 in the S&P 500.

“Will it hold or will it break?”

What happens next on the movement away from 2,000 will define our bullish or bearish strategies.

Here’s a pure price chart to highlight this level and how price has behaved in the past:

Through the latter part of 2,000, we were playing the “Hold or Break” game with 2,000 with our trades.

We’re doing the same thing now as price clearly interacts with this level for the sixth time as shown above.

Earlier in January, buyers saved the market from another decline from this level but this time they collectively may not be strong enough to halt the selling pressure – and stop-losses triggering – on a clean break under 2,000.

Before that – in December – sellers won but were thwarted by positive reaction to the Federal Reserve announcement which catapulted the index to a new yet extremely weak high.

And now we return twice to this level.

Ultimately, sellers are favored here unless bulls/buyers surprise us once again.

Here’s a broader picture with targets and our indicators displayed on the chart:

Cutting straight to the chase, 2,000 is an important level not just from price – it’s also the 38.2% Retracement.

Our Fibonacci Grid shows 1,990 as the short-term pivot and if this level fails as may be expected, then the target play lower extends both toward 1,965 (the rising 200 day SMA – red) and then 1,958 (the 50% Fibonacci Retracement).

Failure at the 1,960 level opens another harsh sell pathway toward the 1,925 price and Fibonacci pivot.

For now, let’s continue focusing our attention on 2,000, the bearish pathway if this floor of support breaks, and of course any intervention surprises the buyers throw along way.

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Corey Rosenbloom, CMT
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2 Responses to “Trade Planning off the 2000 Key Level in the SP500”

  1. Lehman Says:

    Whether we call it Key levels or pivot points all of them are very important and if we are looking to succeed then it’s the key to do that well. I mostly concentrate on Pivot point whenever the market is in confusing state as that enables me to get 15-20 pips easily while I must say thanks to OctaFX broker which has really low margin level of just 25% so that is very handy when it comes to doing scalping.

  2. Crowe Says:

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