Article / 11 January 2016 at 15:38 GMT

All eyes on the 1930s in the S&P 500

Technical Analyst / FuturesTechs
United Kingdom
  • 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

Manhattan in the 1930s
 Are we headed back to the 1930s? -- on the S&P 500 that is. Photo: iStock


By Clive Lambert

It's been a tough year so far for the S&P 500 futures (March '16). We have seen selling from a high of 2,075 points on the last trading day of 2015 to a low of 1,893.50 in today's overnight session, where the market finally found some buyers.

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")
SP500 Daily
Source: CQG Inc 


Weekly chart
SP500 Weekly
 Source: CQG Inc




— Edited by John Acher

 
Clive Lambert is chief technical analyst at FuturesTechs

3y
Clive Lambert - FuturesTechs Clive Lambert - FuturesTechs
After failing shy of this area yesterday it appears we're "having another go" now after a squeeze higher this morning. Things are getting interesting!!!

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail