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The S&P 500 has been on a tear since late December. Buyers have ripped through resistance levels without looking back.
One of those levels was the bottom of an ascending channel that began forming in February of last year.
The market closed above that 2630 area on January 17th. Buyers then defended the region between the 22nd and 29th.
However, S&P 500 bulls may have met their match at 2813.
You can see how this area served as resistance between October and December of last year.
In fact, the December 2018 selloff that took the market to 2314 started at 2813.
This past Monday even carved a bearish engulfing pattern. Buyers held their ground relatively well, but the formation does suggest an increase in selling pressure.
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There was also a 4-hour rising wedge that broke down last week.
I mentioned this and other bearish factors in the member’s area on March 1st when the S&P was trading at 2802.
So far, sellers have had some trouble breaking through horizontal support at 2767.
But as long as the market is below 2813 on a daily closing basis, the S&P 500 is vulnerable in my opinion.
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A break below 2767 would expose 2730 followed by 2675.
Keep a close eye on the 2650/60 area as well. This is the location of ascending channel support that I mentioned at the beginning of this commentary.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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