Downtrend Channel Wall Key Test Next Week On S&P 500
The major indices have had one of the best up weeks that they’ve experienced in about a year.
Short terms traders that followed last weekends FTV video hopefully were able to play the upswing. On the other hand if you are a long term trader then you did not want to buy last week since we continue to be in the boundaries of a downtrend channel. That suggests that you have lower swing highs and lower swing lows.
It is especially risky for any stock trader to try and oppose the trend. The trend is your friend. Stay in the right channel. We are in a down channel so you need to be more bearish than bullish. If we were in an uptrend channel you would want to be more bullish than bearish.
My fellow stock trading warriors, we are at crucial moment going into next week as we roll into earnings season. Everybody is going to be listening to what these earning reports are telling us.
What we have on the stock chart of the S&P 500 is we are at a strategic resistance if you trace the upper downtrend channel line touching the June 21 2010 high.
The crucial resistance zone to watch on the S&P 500 daily chart is 1080 to 1093 on the S&P 500.
The vital resistance zone to look at on the S&P 500 weekly chart is 1100.
The main support level to watch on the S&P 500 is 1050. If we plummet back below 1050, stock traders who are short this market will make a killing.
Accordingly we have a ton of resistance areas coming up that bulls are going to have to break through.
What I believe is going to happen as evidenced by the falling volume over the last week is that we may well get up to this resistance zone and then swing back down. On the other hand, this downtrend channel has had 3 swings up and down now so the life cycle of this trend channel is coming to an end. If the trend was going to reverse, now would be the time to do it.
Technically speaking, as we are still within a downtrend there’s a greater probability of us falling than there is busting through this upper trend channel resistance.
Check out this new technical analysis video from FTV.
U.S. economic news coming next week:
Jul 14 08:30 Retail Sales Jun
Jul 15 08:30 Initial Claims 07/10
Jul 15 08:30 Core PPI Jun
Jul 16 08:30 Core CPI Jun