Wednesday, May 6, 2015

SPX, COMPQ, TRAN: Still in the Range, but Here are Some Key Levels

Since last update, SPX rallied, then hit the upper edge of the trading range and collapsed again.  The trading range continues to reward those who have recognized it for what it is, and are trading it like a range, while punishing traders who hold their positions for longer than a few sessions.  Bulls who bought last week's decline and held are now, at best, at zero profit.  Many of them have likely already been stopped, or are in drawdown (unless they bottom-ticked it last week).

Let's get right to the charts, because there's a bunch of them.

First off, readers have been asking about the potential diagonal:

Basically, until 2072 is broken, the most immediately bullish counts remain technically possible:

If SPX sustains trade below 2072, then we probably have to give the odds to the bear count until proven otherwise:

Here's a basic near-term resistance chart for SPX: (continued, next page)

COMPQ also suggests that a breakdown of near-term support could see some follow-through:

TRAN remains a broader-view issue for bulls, and this chart is materially unchanged for the past few months:

In conclusion, so far there have still been no key level breaks in either direction, but bulls probably need to make a fairly direct stand to keep their most immediately bullish options alive.  If SPX can sustain trade south of 2072, then we should likely expect some bearish follow through.  Trade safe.

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