What’s inside:
- SP 500 sliced through 2380 support, trend-line
- French election gap likely to fill today, and worse
- Price support doesn’t arrive until 2322/29, Feb ’16 trend-line could come into focus at some point
Find out what is driving the stock market in our market forecasts section.
We started out Tuesday’s post by saying this: “The SP 500 has been consolidating since the last week of April, with the period having set a sturdy floor right around 2380; this level has become our ‘line-in-the-sand’ for maintaining a neutral to bullish stance.”
And then the ’Trump dump’ happened.
The SP gapped down to around the 2380 level, then proceeded to quickly slice through taking off the table the notion of further consolidation. The November/April trend-line also broke with 2380. The sell-off put the market in the gap from the first round of the French elections, and with a gap-fill only about 8 handles from where it closed yesterday there is a good chance we see it happen today, and potentially worse. Other than the gap-fill, there isn’t any solid price support until in the vicinity of 2322/29, the March and April lows. If things get nasty, a break below those lows opens clears a path towards a test of the important February 2016 to current trend-line.
Resistance arrives at the April 24 gap-day low at 2369, and should buyers get ambitious the 2380 level should prove to be problematic for a further advance. In the short-run, the market is positioned to continue yesterday’s dagger of a day.
SP 500: Daily
Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.