I would have to say that the primary closing price target for the S&P 500 that I have discussed in recent weeks was that of the 1420-1425 area. I was not certain if the high on May 6 of 1418.26 was close enough. The eventual closing high of 1426.63 set on May 19 would suggest that it was not. That said, the failure swing created by divergent RSI after the May 6 peak was never negated in any manner. We have since seen the markets sell-off to again test the 1390 area.
I believe that it is also important to note violation of the trend channel formed by the closing lows of March 17 and April 14. The S&P 500 broke down below this support level on Tuesday. It would not be uncommon to see the markets meander higher for a day or two to test this trend-line, which now runs around the 1405 area. Should this resistance hold, then I would expect another thrust downward. 1390 remains the significant support, but I find myself intrigued by the possibility of a low around the 1375 area.
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