S&P continue to trade near its all time highs and optimism is high. In our latest posts we noted that the top is most probably in and that we should expect prices to make a downward correction towards 1740 and why not 1725. We continue to believe that the entire upward move from 1646 is complete and the market needs some time now to make a corrective move. Our first target is 1740 for a shallow retracement. Prices have managed to make a move from 1775 to 1752 and we believe that this was only part of the correction. There is more downside to be expected.
Prices are sloping upwards towards the all time highs but we believe soon the short-term upward sloping trend line will be broken and prices will test 1740 support. Bulls have more to lose at these price levels and we give more chances for a continuation of the downward move towards 1740 or 1725 where the 38% Fibonacci retracement is.
Resistance is strong in this area and at least a pull back is justified. For the longer term view, trend will change if prices break below 1660. The first worrying signal for the longer term trend will come if and when prices break below 1700. For now we just expect a pull back towards 1740-44 support. For more help trading this index become a subscriber today. You will have access to our exclusive twitter account where you will access my trades and more analysis with daily stops and targets for major indices-fx pairs and gold. You will also have access to our newsletter send three times a week to our subscribers.
As always, thank you for taking the time to catch up on my thinking.