Our S+P upside target which was stated in this post click here created over three months ago caught the swing high of this current rally almost to the point, 1.5pts to be exact. And has traded as much as 40 points lower since, now the question remains what happens now?
I believe some further downside price correction is to be expected, I’ve marked the immediate areas of support and resistance on this daily chart of the S+P 500 cash. The market has retraced into current resistance, it reamins a time to be cautious now and hedged against future downside.
The next wave lower off resistance should carry the S+P below it’s last swing low at 1340, into the first support zone on the chart. This zone has confluence and matches the last reaction size we experienced in late November and is about a 5% drop from current highs.
Watch for some price stability there, it’s an ideal zone for initiating some long positions targeting above 1400 SP prices.
Be aware however that prices could indeed need to pull back to the support zone below in the 1250-1265 area. This area has multiple confluence zones and matches a 10% pullback from current highs with the last major correction swing in the fall of last year.
I expect this area to be the maximum downside for any such retracement and then a march above 1400, into the 1425-1475 extremely critical price area mentioned in this post click here, should resume.