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Amateur Investors: Weekend Analysis

* October 15, 2016

The S&P 500 appears to be at a key inflection point as it briefly dropped below its upward trend line from the February low. So far it has found support just below the trend line which was at the 38.2% Retrace from the late June low to the August high (green line).



Meanwhile if a 5 Wave affair is occurring from the February low last week's low of 2115 must hold next week. If the 2115 level is broken then a drop back to the 2070 area is possible which is along the 40 Week Moving Average (blue line) and lower Bollinger Band.



Finally the VIX appears to be developing a Triangle pattern as long as it doesn't rise significantly above last weeks high at the 18 level. Keep in mind Triangle patterns can be complex and last longer than expected so it could take another 6 to 8 weeks to complete. Once the Triangle pattern completes then a sharp upward move would follow as we move into 2017. Since the VIX and S&P 500 usually move in opposite directions if a sharp upward move were to occur in the early part of 2017 that would signal a decent correction in the S&P 500.



http://www.amateur-investors.com/AII_Weekend_AnalysisOct_15_16.htm

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