S&P 500 Breaks Down Lower
Alex Gurr | Oct 02, 2014 03:33AM ET
The S&P 500 has broken down lower overnight, after it formed a descending wedge.
Source: Blackwell Trader(S&P 500, H4)
The S&P 500 has had a strong talking point after pushing through the 2000 levels on the charts, with many predicting further bullish rises. The doomsayers have had a good crack at talking down the prospect of further rises in the S&P 500 and they may be right in this case after the recent solid breakdown of the bearish wedge.
However, with the S&P 500 you’ve got to take a look at the bigger picture and in this case there certainly is one on the daily/weekly charts. Which shows that there have been minor corrects each time on the charts.
Source: Bloomberg (S&P 500 Index)
The above chart shows the extent of these minor down trends, each one has been followed by a push back up higher. Something that many people should focus on when trading the S&p 500; where a down trend is not the bearish markets that people are looking for.
Source: Blackwell Trader (S&P, D1)
Instead, people should focus on the above trend line as an initial guide for further lows. It may not go this low or it might break through, even though a bear market would be some time away as there is plenty of space to go on further long term trend lines. For now though be aware that the US is recovering and there is still potential upside in the S&P 500.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.