All eyes on the 1930s in the S&P 500
- The S&P 500 has fallen nearly 9% since the end of 2015
- Bulls' mission today is to retake 1,930 and 1,939 points
- Regaining those levels could open the way up to 1,970, 1,995 and even 2,033.75
- Failure would bring downside targets of 1,910, 1,893.50, 1,861 and 1,831 into view
- One certainty: volatility has not vanished
As you can see from our chart, gaps have been an excellent reference so far on this downward move, capping upside on three separate sessions. Below is a "day session only" chart that cuts out all the overnight "noise" to show just the price action when the "cash" index is trading.
There could have been another gap today had it not been for a strong performance from the DAX in the first few hours of its trading session. This threat seems to have been averted, and some would see this as a sign of a possible turnaround.
I'm not sure about that yet, as my analysis for clients this morning tells me that there are two big hurdles above that need seeing off before I rush to say that a bottom has been reached.
1930 and 1939
So the bulls' mission today is to retake 1,930 and 1,939 points on the S&P 500, and if they mange to do so, we could see a really decent rally as the next resistance levels of any real significance that can be targeted are 1,970, 1,995 and even 2,033.75.
One thing is for certain: the volatility isn't over yet, and we could be in for another interesting week.
Let's finish by looking at downside targets if the market fails to retake the 1,930s.
The first levels to watch are 1,910 and 1,893.50, which are Friday's low and the overnight low respectively. Below these two 1,861 and 1,831 are the obvious targets, the latter being the low from the end of August last year.
Daily chart (day session only, without the overnight "noise")
— Edited by John Acher