Potential S&P 500 – Support Zones

On a daily chart the S&P 500 (SPX) move up from the 03/14/22 bottom was fast and steep.  The reason is  because shortly after a significant bottom has been recognized , traders are eager to establish long positions. The SPX move off of the 03/23/2020 bottom is a classic example of a move up after a significant bottom  Some traders  may hope for a sharp and deep correction, but markets are notorious in dashing the hopes of traders.

The SPX – one minute Point & Figure (P & F) chart courtesy of Trading View illustrates  some potential support zone.

The P & F chart combined with Fibonacci analysis  helps to identify the areas  for the next possible bottom. The first is  P & F cluster.  The lower boundary of the cluster is  at the Fibonacci .236 retracement level of the move up from the 03/14/22 bottom.

If the first support level doesn’t hold, there’s another cluster in the low SPX 4400 area.

Below that cluster is  the .382 retracement level which intersects with P & F chart support at 4383.80.

The 03/21/22 blog “S&P 500 – Fibonacci Time Connection Between 2010 and 2022”  illustrated that on 03/14/22, the SPX had probably completed an Elliott wave – Horizontal Triangle.  Usually after a  Horizontal Triangle is complete there’s a sharp and fast move in the direction of the main trend, which in this case is up.

The action  since the 03/14/22 bottom is exactly what’s expected after the end of a Horizontal Triangle.  Seasonal patterns for US stocks are bullish until late April/early May.  These factors imply the steep rally could continue until late  April.

A shallow correction bottom could be made soon, perhaps in  just one or two trading days.

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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