- breakdown now testing initial slope support
- Updatedtargets & invalidation levels
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Broader Technical Outlook: A break of the objective monthly opening-range shifted the focus lower earlier this week with today’s decline encountering support at the 50% line of the descending pitchfork extending off the highs. Although we may see a near-term reprieve off this level, the outlook remains weighted to the downside while below the August lows at 2147– a breach above this mark is needed to alleviate further downside pressure. A break lower targets the 23.6% retracement of the 2016 range at 2103 & the 100% extension of the decline at 2094(note that the lower median-line parallel converges on this level over the next few days).
Notes: A closer look at the index shows a sharp reversal off the 50-line today in New York with the advance now testing median-line resistance. If this week’s breakdown is the onset of a more meaningful reversal in the SPX, look for resistance to hold at 2147– this level converges on the 50% line into the close of the week.
From a trading standpoint I’d be looking to fade strength while below the median-line targeting objectives into confluence support at 2094 – an area of interest for exhaustion / long-entries.
On the data front, look for the U.S. Advanced Retail Sales & the University of Michigan confidence surveys to offer up some volatility with Fed Chair Janet Yellen also slated for a speech tomorrow morning at the Boston Fed Conference. Continue tracking this setup and more throughout the week- Subscribe to and take advantage of the DailyFX New Subscriber Discount.
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—Written by Michael Boutros, Currency Strategist with DailyFX
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