Wednesday, December 4, 2019

SPX Update: Important Trendlines Come Through

Last update noted that SPX had reached resistance at multiple time frame.  That resistance came through for bears over the near-term in a pretty big way... and SPX dropped all the way back down to the support zone noted on 11/25.  That zone has held so far -- and SPX has bounced more than 30 points (counting overnight action) off of it (again, so far):

The near-term trend line chart also came through:

In conclusion, recently published charts proved to be extremely valuable during the recent move, providing excellent entries and exits for an 80-plus point move.  While it's probably tempting for bears to get excited after that sharp decline, so far there are only three waves down to yesterday's low at the red intermediate support zone (first chart), and a test of that zone is perfectly normal even for a bull run.  The only thing that might cause bulls a little doubt is the fact that we got there extremely quickly -- so I'm not implying bulls should be complacent here.  However, bears should be aware that the decline does form a potentially-complete ABC into a (theoretically) solid support zone, so if bulls want to run it up to new highs from here, there's nothing that says they can't.  If bears can sustain a breakdown at red support, then things might start to look more bearish.  Trade safe.

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