Breaking Through Resistance – Part -Two

So far the S&P 500 (SPX) has been able to have two daily closes above the 200 – day moving average (MA). This was probably a factor in bringing in buying at the open of the 12/02/22 session. There’s still one potential resistance barrier to overcome – the declining trendline from the January 2022 all-time high.

The daily SPX chart courtesy of Trading View illustrates the action.

On 12/01/22 the SPX broke marginally above the trendline but closed below the line.  Short- term evidence noted in the prior blog implied the SPX could rally on 12/05/22.  If so, and the SPX is able to close above the trendline on 12/05/22, there’s a good chance it could trigger additional stock buying.

A breakthrough of the trendline opens the door for a move back to at least the SPX 08/16/22 high.  The upper end of the price zone is about where the final portion of an Elliott wave – Expanding Flat could terminate.  Prior blogs have noted that an Expanding Flat may have begun at the SPX bottom made on 06/17/22.  If so, wave “C” may have started at the 10/13/22 bottom.  Wave “C” in  Expanding Flats  end marginally beyond the termination points of wave “B” – this case the 08/16/22 high.  If the current SPX rally continues a future blog will examine this theory in greater detail. 

The broad time  zone for a  potential top is  from 12/12/22 to 12/23/22.  The next FOMC meeting/announcement is  on 12/14/22, sometimes significant stock market turns occur on FOMC  announcements.  If US stocks continue to rally after 12/14/22 the next new moon is  on 12/23/22. Occasionally market  trend changes come on or near new/full moons.  For stock markets new moons tend to signal tops.

The most important support level is  the bottom made on 11/29/22 at  3,937.64. A move below this  point would wipe out all of the gains from the powerful 11/30/22 rally and could open the door for a retest of the 10/13/22 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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