S&P 500: A Sustained Break Above 4030 Signals a Bullish Breakout

It is make or break for Emini today as we test:

  1. The 1-year 38.2% Fibonacci resistance at 4000.
  2. The 5-month 61.8% Fibonacci resistance at 4012.
  3. The 1-year downward sloping trend line at 4020.
  4. In overbought conditions.

Even on the short-term charts, taking my Fibonacci levels from the December high, we have a 61.8% resistance at 4008.

S&P 500 Chart

‘ March contract has recovered 50% of the December loss and closed above the 100-day moving average at 11565.

Nasdaq Chart

We have a 3-month bear flag in the Emini Nasdaq as we test the red 200-week moving average resistance.

Nasdaq Futures Chart

Nasdaq Futures Chart

Today’s Analysis

Emini March held resistance at  4000/4020. Targets for shorts are 3950/40 and 3900/3890.

A sustained break above 4030 signals a bullish breakout, and I have to take this as a medium-term buy signal. A minimum 100-point jump would then be expected.

On Nasdaq March, we wrote: break above 11570 can target 11650/700. A high for the day at 11638, so I was pretty close. If we continue higher, look for 11900/950.

A minor negative candle formed yesterday, but I must wait for a sell signal – no sign of a turn yet, although bulls need prices to hold above 11580/530 to remain in complete control. A break below 11500 risks a slide to 11450/400, perhaps as far as 11250.

have support at 34100/050 with a bounce to target 34450/500. Further gains can target 34700.

Until we get a sell signal, we can buy at support at 34100/050. Below 34000, however, risks a slide to support at 33870/840.

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