Getting Technical With The S&P 500 Index [SPDR S&P 500 ETF Trust, ProShares UltraPro S&P 500 (ETF), ProShares Short S&P500 (ETF)]

Share This Article
March 11, 2014 11:18am NYSE:DIA NYSE:SDS

technical chart lookCorey Rosenbloom: What S&P 500 levels are we watching and what are we planning for the immediate trading strategies this week?

Let’s start with the Daily Chart and plan a “Pullback Pathway” tempered with an “Alternate Breakout”Plan:

SPX S&P 500 SP500 Daily Chart Pathway Planning Trend Pullback Retracement

As I continue to highlight in the Game-Planning Daily Membership, classical odds favor a pullback or retracement down against the 1,875/1,880 index level.

We’ve seen four reversal candles at the highs along with a negative momentum and volume divergence.

While that certainly doesn’t guarantee a pullback, it does suggest that the logical thesis would be to expect a retracement down from current resistance at least toward the 1,850 confluence of the rising 20 day EMA and prior price high polarity level.

I also highlighted prior events where price broke to new highs, triggering an immediate “Short Squeeze” or upside breakout to continue the trend.

In all cases, short-sellers helped contribute to the upside action with their collective stop-losses that triggered at each new high.  The Alternate – yet equally valid – thesis would call for long/bullish trading tactics on an breakout above 1,880 which could set-up a one-way pathway straight to 1,900.

Here’s the hourly chart for additional short-term planning:

S&P 500 SPX Hourly Chart Trade Planing Game Planning

I drew horizontal lines from each short-term new high to call your attention to similar recent scenarios.

There was at least a “pop” or impulsive move up after price broke above the prior highs, again triggering both stop-losses from the bears/short-sellers which combined with bulls/buyers putting on new breakout positions or else adding to existing positions.

That’s simply what we’re planning for at the moment – a logical downside price pathway to trigger a sell signal here and under 1,870 (which opens a “dominant thesis” play toward 1,860 then 1,850’s confluence) or an alternate breakout thesis that throws all the divergences out the window and suggests a straight-up impulsive moment toward 1,900.

As traders, we’re not here to predict the future, but to set-up an unbiased, objective game-plan that allows us to adapt in real-time to what actually happens in price – not what logically should happen.

This article is brought to you courtesy of Corey Rosenbloom from Afraid to Trade.

9 "BUY THE DIP" Growth Stocks For 2020

Read Next

Get Free Updates

Join over 50,000 investors who get the latest news from!

Most Popular

Explore More from

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again! respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories