Wed 24th Sept

The S&P500 traded lower overnight and is back below the psychological 2000 level. The important point to keep in mind here though is that the daily support trend line that has been intact since Nov 2012, a period of almost two years, is still intact today.

S&P500 daily: The daily trend line has been intact since Nov 2012 and this support currently comes in at down near the 1,950 level. Any break and hold below the daily support trend line would have me looking towards a test of the monthly support trend line. Note how the monthly support trend line is not too far from the 61.8% fib of this recent two-year bull run. Thus, a test of even the monthly support trend line, whilst seemingly quite drastic, would still be in keeping with any overall continued bull run:

S&P500 Ichimoku: the index is still above the daily Ichimoku Cloud and the ‘long’ signal remains open until the Tenkan/Kijun lines fuse. Important to note here is how the the top of the daily Cloud is also near the 1,950 level: in confluence with the daily support trend line:

Regular blog readers will recall that I am expecting the previously broken monthly trend line, down near 1,577, to be tested again before any long term continuation. This has been discussed in previous posts such as the one found through this link. I would need to see a break of daily and monthly support before being concerned about such a deep pullback move here:

Summary:

• the S&P500 is struggling at the 2000 psychological resistance level. A daily support trend line remains intact for now and is down near the 1,950 level.
• Any break and hold below this daily trend line support would have me looking for a test of the monthly trend line support. The monthly trend line is down near the 61.8% fib pull back level of the recent two-year bull run.
• Any break and hold below the monthly trend line support would have me looking for a test of the previously broken trend line down at 1,577.