Two SP500 Triangles and Updated Selloff Level Planning

Apr 1, 2015: 9:23 AM CST

The stock market fell victim to sharp selling pressure overnight that continued into the morning session.

Sellers and bears have a key support level ahead of them and buyers are eying it eagerly.

Let’s highlight two triangle support levels for the S&P 500 and plot the current short-term plays:

The chart above is a pure-price perspective of the S&P 500 with two triangle patterns highlighted.

Stock Prices coiled in they yellow triangle through most of 2015 so far, only to see a February breakout falter and create a second, smaller purple triangle.

At the moment, stock prices trade into the lower trendline boundary near 2,050.

Note the planning pathway – a support-bounce up off 2,050 suggests a play back toward the 2,090/2,011 upper trendline to continue the range.

However, a trigger-break under the current 2,050 level suggests a downside play toward the midpoint of the prior triangle at 2,020.

Here’s a broader perspective beyond the pure price and triangle chart:

We see the two triangles with rectangle highlights (simply a different perspective).

Note the persistent uptrend and semi-repeat structure to what we saw in January.

At this point, we’ll be BEARISH on a trigger-break under 2,045 and 2,040 to target the 2,020 confluence.

Otherwise, we’re support-BOUNCE bullish just to play a possible swing up to continue the pattern.

Use these levels and the prior triangle example into your current analysis and positions.

I’m excited to announce that I’ll be joining six other great speakers  at a Two-Day intensive boot camp in May!

Check out the details and start planning the trip today to join us in May.

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).

2 Comments

2 Responses to “Two SP500 Triangles and Updated Selloff Level Planning”

  1. Key Chart Level Planning for Dow SP500 NASDAQ and Russell April 1 | Afraid to Trade.com Blog Says:

    […] For additional background and specific planning, see this morning’s update post “Two Triangles and Level Planning for the S&P 500.” […]

  2. Bouncing Bull Market Update and Big Stock Scan April 2 | Afraid to Trade.com Blog Says:

    […] Two S&P 500 Triangles and Level Planning […]