S&P 500 Reaches Support Zone – 02-11-22

Markets  are perpetual battles between bulls and bears, each side testing support/resistance points and attempting breakthroughs.

The 30 – minute S&P 500 (SPX) chart courtesy of Trading View illustrates a recent battle.

On 02/09/22 and 02/10/22 the bulls attempted a breakthrough of the peak made on 02/02/22. Both attempts failed with the second trust up on 02/10/22 unable to break above the high made on 02/09/22.  The bears then seized upon this failure and launched a powerful counterattack.

The thrust down has  brought the SPX  to a .618 retracement of the 01/28/22 to 02/02/22 rally, a logical spot where you would expect the bulls to defend.    

The 30 – minute SPX500 – Point & Figure (PF) chart  provides clarity to the support/resistance points.

SPX500 is an index on tradingview.com the symbol is SPX500.  This index shows  the action of a perpetual S&P 500 E-Mini contract yet its  priced similar to the SPX . 

PF charts are highly effective in discovering support/resistance because they focuses only on price.  X’s represent rallies,  O’s  illustrate declines.

The two failed rallies  represent significant resistance.  After the 02/10/22 peak the bears were able to breakthrough powerful support at 4530.47 which was the lower boundary of a seven – column row.  The degree of strength is determined by the number of columns in a  row.  The row just below 4530.47 was  also seven-columns – equal in strength and unable to stop the move down. 

Below the second seven column row bullish barriers were  progressively weaker.  A five column then a four column, and finally  a  two-column row.  The  bears where able smash through these feeble defenses. 

Near the end of the 02/11/22 SPX trading session prices  had reached a  major bullish support zone – the upper boundary of a nine-column row.

If the support holds the bulls could then mount a rally to attack the significant resistance at the 02/02/22, 02/09/22, and 02/10/22 triple  peak.  

If  on 02/14/22, or in the next few trading days, the bears  can punch through the powerful support zone, it could open the door for a move to at least  the 01/24/22 bottom.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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