S&P 500: A Sustained Break Above 4030 Signals a Bullish Breakout
Jason Sen | Jan 17, 2023 03:17AM ET
It is make or break for Emini S&P 500 Futures today as we test:
- The 1-year 38.2% Fibonacci resistance at 4000.
- The 5-month 61.8% Fibonacci resistance at 4012.
- The 1-year downward sloping trend line at 4020.
- In overbought conditions.
Even on the short-term charts, taking my Fibonacci levels from the December high, we have a 61.8% resistance at 4008.
Nasdaq 100 Futures' March contract has recovered 50% of the December loss and closed above the 100-day moving average at 11565.
We have a 3-month bear flag in the Emini Nasdaq as we test the red 200-week moving average resistance.
Emini S&P 500 March held resistance at 4000/4020. Targets for shorts are 3950/40 and 3900/3890.
A sustained break above 4030 signals a bullish breakout, and I have to take this as a medium-term buy signal. A minimum 100-point jump would then be expected.
On Nasdaq March, we wrote: break above 11570 can target 11650/700. A high for the day at 11638, so I was pretty close. If we continue higher, look for 11900/950.
A minor negative candle formed yesterday, but I must wait for a sell signal - no sign of a turn yet, although bulls need prices to hold above 11580/530 to remain in complete control. A break below 11500 risks a slide to 11450/400, perhaps as far as 11250.
Dow Jones Futures have support at 34100/050 with a bounce to target 34450/500. Further gains can target 34700.
Until we get a sell signal, we can buy at support at 34100/050. Below 34000, however, risks a slide to support at 33870/840.
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