Time To Take Profits? The S&P 500 Just Had A Big Week Down

Published 12/13/2014, 11:33 PM

Below is a weekly chart of the S&P 500. What stands out a bit is the last candle, which represents the price action over the past week. It was the largest weekly high-to-low decline since June 17 of 2013 -- just shy of 18 months ago.

S&P 500

This decline puts us at the bottom of the weekly channel going back to mid-January of 2013. However, that channel was broken in the down move that occurred in the week of October 6, 2014 -- a weekly decline that was almost as large as the decline we saw this week. That setup a megaphone pattern, illustrated by the blue trendlines on the chart, that we also discussed previously. If that pattern plays out and this week's decline is a step in that direction, that gives us a downside target of around 1770.

Personally, I think it would be a good time to take some profits on, but leave some on as I think equities could still go much higher if capital flees bonds over the next few years.

What do you think?

Original post

Latest comments

Risk Disclosure: 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.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.