Wednesday, August 26, 2020

SPX Update: Long-term Chart Shows SPX at Important Line

 Last update discussed how we were just going to focus on basics for the time being, and today, we have an important long-term chart to examine.  Let's get right to it.  The following chart is simply the bull market since 2009 (I don't buy into the commonly-accepted idea that "a 20% correction is a bear market!" -- I think that's too simplistic).

Anyway, note the blue trend line, which SPX has just reached... and don't just see one side of that trade (i.e.- don't view it only as "resistance"); note what happens if it sustains a breakout:

We can see this is likely an important zone.  Breakouts have taken SPX toward the black trend line, while rejections have sometimes taken it back toward the first red trend line immediately below the blue line  (Except in 2017, it hugged the line for months before breaking out.)

On the hourly chart, nothing has changed and SPX has remained within its uptrend channels:

In conclusion, nothing has changed since last update, but SPX is reaching a zone that has been important in the past.  If it wrestles with that zone, we could see a correction develop.  If it sustains a breakout over, then bulls may continue their party.  Trade safe.

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