S&P 500: Ship steadies at key support level
- 2,116-2,120 is a really big area of support
- The support area is holding very firm
- Quadruple witching in futures and options Friday
- We may soon see new all time highs
A look at the chart for the "Cash" actually tells us something that wasn't so clear on the Futures charts that I usually favour; that 2,116-2,120 is a really big area of support... and so far it's being defended with some vigour.
Chart 1: S&P 500 Index showing 2,116-20 as important support level.
The next week or so is not without it's share of challenges or events for the market. Tomorrow sees the "quadruple witching" when futures and options expire on US Equity Indices, something that can and does cause spikes in interest and volaility. Then we have the Fed next week, of course.
From a chart persepctive the bulls need to keep doing the work they've been doing in defending this 2,116-20 area, otherwise there's scope for a move back to 2,058-68 where we have the 200-day simple moving average and the deeper 61.8% Fibonacci level.
But all the time we're above this key area of support I'd be favouring the bulls and think we'll soon see new all time highs. One thing I was saying throughout the summer was that tops don't look like this. Tops are not "flat" affairs. I must admit I thought we'd break the summer impasse to the upside, so I was wrong about that, but on the basis of everything I've said above I don't think the bulls are done yet!
Chart 2: Weekly Bar chart - Just in case you this latest the selloff was scary or worrying... doesn't look such a problem on this timeframe, does it?!