Trapped in a trading range between 1680-1695, the S&P index will soon start a new trend either towards 1650 or 1720. Amidst concerns regarding the implications of a government shutdown, bears are expecting the index to break the support levels and challenge the longer term trend. On the other hand bulls are feeling comfortable as prices have taken an upward slope as shown in the chart below.
Short term support is found at 1680-75 and short term resistance at 1695-1700. If prices manage to break below the short term support level, then we should anticipate heavy selling to push the index at least towards 1660 and most probably towards the pitchfork support at 1640. If support holds and prices break above the 1700 resistance, then a move towards 1715-20 at least should be expected.
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As always, thank you for taking the time to catch up on my thinking.