Updating Your New Levels for the SP500 and Dow Jones Oct 5
As we start a new trading week in October, a bullish five-day rally has taken price to a key upside target level.
Let’s update this level and our new targets for these major US Market Indexes.
We’ll start with the S&P 500:
A bullish reversal candle at the 1,880 target support level – complete with positive divergences – set the stage for the current impulsive bullish rally “up away from” the 1,900 level.
Note the prior update last week entitled “Buy or Sell? Updating the US Stock Market Levels.”
Price held 1,900 support intraday then shattered the falling 20 week EMA at the 1,945 pivot level.
Today’s session opens with a strong bullish rally to the new short-term target near 1,985 which is the falling 50 day EMA (blue).
This level will also form a confluence with the closing price high on the spike reversal session mid-September.
Ultimately the 2,000 level is in focus and will be a key level to monitor on the upside.
Should the market continue this bullish charge, we’ll compare it to the October/November 2014 Charge.
Nevertheless, traders should monitor the 1,980 to 2,000 zone as a pivot where the bullishness continues above, or else we have another stall and pullback (retracement) against this pivot level.
The picture is similar in the Dow Jones Industrial Index (The Dow):
The Dow Jones Index rallied “up away from” the 16,000 level toward the current target just shy of 17,000.
The overlap of the falling 50 day EMA and the spike reversal closing high in September is near 16,800.
Like the S&P 500, if the Dow Jones can shatter overhead resistance here, it will open a bullish upside play first simply toward 17,000 and then on toward the 17,400 and 17,600 prior support price pivots (and falling 200 day SMA).
We’re keeping the analysis and planning simple as we focus on the price movement toward or away from key levels.
Trades – swing or intraday – develop from the price movement.
Focus on these levels and as always, be safe.
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
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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).
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