Important Double Bottom and Top

The 04/06/22 blog “Support Reached and Breached” noted that the S&P 500 (SPX) early day bottom at 4460.00 was near two Fibonacci support points at  4463.72 at 4455.63.  Later in the trading session this support was broken, and the SPX made a lower bottom at 4450.04.

It appeared that this break could open the door for a decline down to the low 4200 area.  However, the next trading day – 04/07/22 the SPX reached 4450.30, almost an exact hit of the prior day bottom.  The double bottom has established a new important support level. 

The 04/07/22 blog “Rally into Resistance” noted the test of the prior day low and the subsequent rally into two Fibonacci resistance points at 4521.57 and 4521.74.  The SPX  high on 04/07/22 was 4521.16.  The next trading day – 04/08/22 the SPX  high  was  4520.41 creating a  double top.

The SPX  -15 – minute chart courtesy of Trading View illustrates the double top and bottom.

A  break above the top could trigger at least a multi-day rally.  A break below the bottom could trigger at least a multi-day decline.

Time  is  running out for stock bulls.  Seasonal patterns for US stocks are bullish into late April/May – there are only fourteen trading days remaining in April.

Time  is  not the only factor stock bulls have to contend with. While the SPX meandered in a three-day trading  range, the yield/rates  on US government bonds/notes have  been rising.

Money gravitates  to where its  treated best. 

Soon, if not already, stock fund managers could be allocating some of their money into short-term US government notes.

The next blog will examine the rise of interest rates  and an alternate  bearish SPX – Elliott wave count.           

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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