Friday, August 28, 2015

S&P 500 Runs Into Resistance

After tumbling 260 points in 4 days S&P 500 index managed to find support 1860 area having reached its’ lowest point of 1833 (the lowest level since October of last year). You can see from the daily chart below that price of the security sits around 1980 level, which was previous technical support from 2014 December through February of 2015. We may say that the price has already recouped more than half losses in the last three days. It means we may see more resistance and roadblocks on the road that may stop the index from rising further. 

If you checked the hourly chart you would also see that price bumped into 200 sma and was not able to overcome it today. A bearish pin is also there on the hourly. On the other hand, intra day support is also clearly seen at 1950 area, which acted as resistance for three days (August 24, 25 and 26). When price fell to the area on the 27th (briefly) a bullish hourly candle formed immediately. If the recent drop was a temporary thing, we may expect to see more consolidation at current price levels and then a rise back to 2040 (minimum), and maybe even to all time high. 

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