I’ve been discussing this concept behind the scenes but wanted to share a little insight with this morning’s example of broken resistance leading to a break-out (along with a great triangle example!). Let’s take a look:
Structurally, after the recent rally from the 875 lows, the S&P 500 is challenging possible resistance at the 955 level which comes from both the January and June 2009 highs. We’re also picking up an internal negative momentum divergence along with a TICK (high) divergence at these levels which should call our attention. Let’s look at the structure.