The sharp rally in the equity markets this past week pushes the S&P 500 back into a zone that should present problems. I've included below, three important factors you should be considering in this market:
Strike one is that we've already reached a 50% Fibonacci retracement from the high seen at 1116.59 and the low of 1022.40. This area indicates increasing resistance on the upside for the S&P 500
The second strike against the S&P 500 is the downward trend line from the mid-April high that intersects the market around the 1080 level. This technical force should also act as a resistance level.
The third strike is our monthly "Trade Triangle" which remains in a negative position. The monthly "Trade Triangle" is also confirmed by the weekly "Trade Triangle" which remains in a negative position. The -75 score indicates that the downtrend, while not as strong as before, remains intact.
Based on these three strikes, we expect the market to move first into a trading range and then to resume its downward path.
All the best,
President of INO.com
Co-founder of MarketClub