The weekly chart of SnP 500 below shows, a two bar reversal signifying a lil change in short term trend! But the bigger picture is still bullish! Well for starters we are still nicely advancing in a rising channel. We have a nice support happening at 980 odd levels where the 20 and the 50 periods MA are giving a crossover. More important is the level lat 935/50 which is likely to play a key role; Old Highs turn to Supports! And last but not the least we are yet to get the most important Dow Theory Signal; Failure to make a new high and then making a new lower low! Till these conditions hold we can safely assume the trend to be bullish on weekly chart. Period.
On the daily chart what now looks like a wedge is at important triple support zone;
- Pattern TL support
- Old Resistance (see ellipse) turn to support
- 20 periods Moving average!
Breaking and giving a close below these, means testing times for the 50 and the 200 periods MA’s below. By the way 200 MA on the daily is approximately at the same level where we have the 20/50 periods MA crossover happening on the weekly chart.
Bottom-line? Well 950/980 looks a good support for now and 1100/1150 a good resistance for the time being!
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