High Stakes Area of Support Under Siege
The action today to kick off the second quarter of 2018 was about as ugly as it gets.
- SPX -2.23%
- QQQ -2.89%
- IWM -2.44%
But despite today’s selling, the S&P500 is still trying to hold on to this high stakes area of support around this 2580 level which is precisely where buyers emerged in early February.
Thanks to the late day rally, you can see we did not make new yearly closing lows.
If you’re a bull, this is exactly where you want to see prices hold. A bounce right around here would be the perfect technical hold of the longer term weekly trendline extending from 2016, and the approximate lows from February.
The bad news is, bears have momentum on their side, and given we have just wrapped up some emotional back and forth trading in this 2590 – 2650 range from the past week, a fresh break below here would suddenly create a new set of bag holders.
So going forward, the more time we spend holding above 2580 the better. A break and close below that level and our expectations are that more sellers would be quick to join the party.
On the constructive side, there are some hints of positive breadth divergence out there. We’ll discuss that and more in our in our midweek video recap tomorrow. You can find it posted after the bell on our blog, or on YouTube.
Good luck out there.
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