The S&P 500 Could Hit a Wall Around 2600

Discussion in 'Wall St. News' started by dealmaker, Jan 10, 2019.

  1. dealmaker


    The S&P 500 Could Hit a Wall Around 2600
    By Ben Levisohn
    Jan. 10, 2019 2:21 p.m. ET
    Illustration by Michael Haddad
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    2:13 p.m.TheS&P 500had erased its losses on the day and was cruising higher, only to suddenly pull back. Blamethe government shutdown?Trade?Chinese economic data? No. Let’s blame resistance.

    Resistance is term in technical analysisthat refers to an area on a chart where a stock, index or other security might run into selling pressure. For the S&P 500, major resistance stands at around 2600, near the lows reached earlier this year. The S&P traded as high as 2592.96 before pulling back this afternoon.

    S&P 500Resistance2018’19220023002400250026002700280029003000S&P 500xFeb. 6, 2018x2695.14
    Technicians have other, more complicated, ways of determining that resistance is around 2600.Evercore ISI’s Rich Rossuses the 50-day moving average—the average of the last 50 closing prices—to identify resistance at 2635. “I have strong conviction that the current leg of the rally in the S&P tests the 50 day ma at 2,635 at a minimum,” he writes. “I have lower/some conviction that we overshoot that target to approach the 50 week/200 day ma around 2,731-2,740. The former is the call; the latter is part of the conversation.”

    Rick Bensignor, president ofBensignor Investment Strategies, refers to “trend factors,” which he defines as a way “to define important support or resistance levels from previous highs or lows of moves, measured in increments of 5.56%,” but reaches a similar conclusion: Resistance is just above 2600, at around 2608. For Bensignor the conclusion is obvious. “The 200+ point rally was the easy part of this bull move,” he writes. “Now things should start getting more challenging.”

    If nothing else, it feels like a pause. The S&P 500 has risen 0.2% to 2589.99, while theDow Jones Industrial Averagehas advanced 69.02 points, or 0.3%, to 23,948.14, and theNasdaq Compositehas ticked up 0.1% to 6965.06.

    Write toBen Levisohn
  2. Buy1Sell2


    Maybe yes---Maybe no. Short term trend is up.
  3. I don't see anything significant about SP 2600 on the chart. However as 2600 is being tested, the NQ is testing the .618 Fib retracement from the early December swing high.

    (Technical trades are born from such things.)

    Last edited: Jan 11, 2019
    vanzandt likes this.
  4. lamden


    This could be true, but I do not think the SP 500 is as easy as predict as your sources indicate.