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Replies to post #27960 on Market Direction and Stock Trends
05/26/19 9:50 AM
The S&P 500 held support for the 2nd time in the last two weeks near the 23.6% Retrace which is just above the 2810 level.
Based on the current chart pattern, in the S&P 500, there are three possible scenarios to watch for over the next week or so. The first scenario is a Head and Shoulders pattern. If the Neckline (black line) is broken to the downside, then the target range would be in the 2725 to 2650 range. 2725 is near the 38.2% Retrace and is where the S&P 500 found support in March (point A) while the 2650 area is at the 50% Retrace (point B).
The 2nd scenario is that the S&P 500 is exhibiting an "abc" type pullback after its strong move upward from the late December low. In this scenario the target for "c" would be around 2725 which is near the 38.2% Retrace. For either scenario to occur the S&P 500 would need to close below the 2800 level next week.
The third scenario would be the S&P 500 is forming a small "Double Bottom" pattern. In this scenario the S&P 500 needs to hold support next week near the 2800 level. If this occurs then the S&P 500 would likely make one more attempt to make a new high near the 3000 level this Summer.
Remember the 3000 area is where the 261.8% Fib Extension Level calculated from the 2009 low.
